6 Common Taxes in Singapore For Individuals & Businesses

In Singapore, there are various taxes that you have to pay, depending on whether you are an individual or a corporate entity. This article will discuss the following 6 most common taxes in Singapore for individuals and corporate entities:

For individuals:

• Personal income tax

For corporate entities:

• Corporate income tax
• Income tax for sole proprietorships and partnerships

For individuals and corporate entities:

• Goods and Services Tax (GST)
• Property tax
• Buyer’s stamp duty and Additional Buyer’s Stamp Duty (ABSD)

For each of the taxes discussed, this article will also provide a brief summary of:

• What is the tax and who/what does it apply to?
• What are the applicable tax rates?
• Whether there are any exemptions? (where applicable)

For Individuals

1. Personal income tax

What is personal income tax and who/what does it apply to?

Personal income tax is a tax that is levied on an individual’s wages, salaries, and other types of income.

The general rule is that personal income tax applies only to income earned in Singapore. However, there are three limited exceptions to this, where income earned overseas is also taxable:

1. If your income is earned overseas but is received in Singapore through partnerships in Singapore. To put it simply, if you are a partner in a partnership in Singapore, whose business generates income overseas, your share of such income is also reportable and taxable as your personal income.
2. If your employment overseas is incidental to your employment in Singapore, i.e. your work in Singapore requires you to travel and work overseas.
3. If you are employed outside of Singapore on behalf of the Singapore Government (e.g. if you are a foreign service officer from the Ministry of Foreign Affairs or a Singapore Armed Forces Regular Serviceman posted overseas) .

What are the applicable tax rates?

The applicable tax rates will differ depending on whether you are a tax resident in Singapore. Tax residence is any place where you are legally required to pay taxes. You qualify as a tax resident in Singapore for a particular year of assessment (YA), if you are a:

1. Singapore Citizen or Singapore Permanent Resident (SPR) residing in Singapore save for short periods of time spent overseas. While there is no specified length of time that an individual has to be in Singapore for, your temporary absences must be reasonable and not inconsistent with an intention to regard Singapore as your permanent home. Therefore, annual vacations or work stints abroad will still qualify you for tax residency in Singapore.
2. Foreigner who has stayed or worked in Singapore for at least 183 days in the previous calendar year (i.e. for YA 2023, the period of assessment is from 1 January 2022 to 31 December 2022) or continuously for 3 consecutive years.
3. Foreigner who has worked in Singapore for a continuous period crossing over 2 calendar years, and you have stayed in Singapore for at least 183 days. This applies to foreign employees based in Singapore but excludes company directors, public entertainers, or professionals (defined here). 
4. Foreigner issued with a work pass that is valid for at least a year.

For Singapore tax residents, the following personal income tax rates are applicable:

Chargeable Income	Income Tax Rate (%) for YA 2017 to 2023
First $20,000 Next $10,000	0 2
First $30,000 Next $10,000	– 3.50
First $40,000 Next $40,000	– 7
First $80,000 Next $40,000	– 11.5
First $120,000 Next $40,000	– 15
First $160,000 Next $40,000	– 18
First $200,000 Next $40,000	– 19
First $240,000 Next $40,000	– 19.5
First $280,000 Next $40,000	– 20
First $320,000 In excess of $320,000	– 22

For non-Singapore tax residents, the following personal tax rates are applicable:

Type of Income	Income Tax Rate (%)
Employment income (e.g. salaries, bonuses, allowances)	15, or the applicable tax rate for Singapore tax residents, whichever is higher
Director’s fee, consultation fees and all other income (e.g. rental income from properties, pension)	22

If you are still unsure of which rates above apply to you and wish to calculate your personal income tax liabilities, you can use the tax calculators provided by the Inland Revenue Authority of Singapore (IRAS) for Singapore tax residents and Non-Singapore tax residents respectively.

Are there any exemptions?

The only exemption applicable to personal income tax is for non-Singapore tax residents earning employment income in Singapore. If you work in Singapore for 60 days or less in a calendar year, you will be exempt from paying taxes on your income.

For Singapore tax residents, while the exemption does not apply, you may want to check if you qualify for any: 

• Tax rebates;
• Tax reliefs; or
• Tax deductions.

Tax rebates are the most straightforward of the three. The government offers one-off personal tax rebates periodically. Such tax rebates offered by the government will be computed and granted automatically by the IRAS, so it is not something that you will have to apply for beforehand. For Singapore tax residents, the government provided a 50% tax rebate of up to $200 in YA 2019, and a 20% tax rebate of up to $500 in 2017. 

Tax reliefs are available for certain categories of individuals, such as working mothers, self-employed individuals, grandparent caregivers etc. You can access the different tax reliefs available on the IRAS website, and ascertain which reliefs are potentially applicable to you. Unlike tax rebates, you have to make a claim for tax reliefs, so it is especially important that you confirm that you meet the qualifying conditions of the reliefs before making a claim. Do note that there is an $80,000 tax relief cap per individual per YA.

Lastly, to encourage Singaporeans to give back to the community, there is a tax deduction scheme for qualifying donations for charitable causes. Such donations can take the form of cash donations or shares donations, among others. Tax deductions are given for donations made in the preceding year. Thus, if you made a donation in 2021, the tax deduction will be applied to your tax assessment for YA 2022. Similar to tax rebates, you do not have to make a claim for tax deductions, as they are automatically computed based on the information from the charitable organisation.

To find out more about tax rebates, reliefs or deductions, you can read the self-help guides on the IRAS website.

For Corporate Entities

2. Corporate tax

What is corporate tax and who/what does it apply to?

Corporate tax is a tax imposed on the profits of corporations. Corporate taxes are levied on the corporation’s taxable income, which is generally calculated by deducting the corporation’s expenses from the company’s revenue.

Corporate tax applies to both local and foreign companies that carry on business in Singapore. The tax applies to income that is earned in Singapore, and also to income earned overseas when it is remitted to Singapore.

What are the applicable tax rates?

All corporations are taxed at a flat rate of 17% of their chargeable income.

Are there any exemptions?

There are two main tax exemption schemes that reduce the corporate tax liabilities for companies.

The first tax exemption scheme is targeted at new start-up companies, to encourage and support entrepreneurs starting their businesses in Singapore. All new start-up companies qualify for the tax exemption scheme, as long as they:

• Are incorporated in Singapore;
• Are a Singapore tax resident for the YA;
• Have their total share capital beneficially held directly by no more than 20 shareholders throughout the basis period for that YA, where all the shareholders are individuals or at least 1 shareholder is an individual holding at least 10% of the total ordinary shares issued by the company;
• Do not have investment holding as their principal activity; and
• Do not undertake property development for sale, investment, or both.

The new start-up companies tax exemption scheme applies to qualifying companies for their first 3 consecutive YAs. From the fourth YA onwards, companies no longer come under this tax exemption scheme but can still qualify for the second tax exemption scheme below. Since the YA of your company affects the period during which you are eligible for this first tax exemption scheme, it is important to determine the YA of your company, which depends on the financial year end chosen and the closing date of the first set of accounts. You can visit the IRAS website for more information on how to determine your company’s first YA. 

The quantum of the tax exemptions for qualifying companies are as follows:

Tax Exemption Rate (%) for YA 2019 and before	Tax Exemption Rate (%) for YA 2020 onwards
100% for the first $100,000 of chargeable income	75% for the first $100,000 of chargeable income
50% for the next $200,000 of chargeable income	50% for the next $100,000 of chargeable income

The examples in the table below will illustrate how the two sets of tax exemption rates will apply. Assuming the company’s first three YAs are YA 2019, YA 2020, and YA 2021, both rates will apply depending on the YA:

YA	Chargeable Income	Tax Exemption Rate (%)
2019	First $100,000 Next $200,000	100 50
2020	First $100,000 Next $100,000	75 50
2021	First $100,000 Next $100,000	75 50

Based on the above rates, the maximum exemption per year for YA 2019 and before is $200,000 (i.e. 100% of $100,000 + 50% of $200,000), whereas the maximum exemption per year for YA 2020 onwards is $125,000 (i.e. 75% of $100,000 + 50% of $100,000).

In order to claim the new start-up companies tax exemption, you will have to complete the two forms that can be found on the IRAS website.

The second tax exemption scheme is for all other companies that are not claiming the tax exemption for new start-up companies, and is known as the Partial Tax Exemption Scheme.

The quantum of the tax exemptions for the Partial Tax Exemption Scheme are as follows:

Tax Exemption Rate (%) for YA 2019 and before	Tax Exemption Rate (%) for YA 2020 onwards
75% for the first $10,000 of chargeable income	75% for the first $10,000 of chargeable income
50% for the next $290,000 of chargeable income	50% for the next $190,000 of chargeable income

You may wish to read our other article for a more detailed overview of Singapore’s corporate tax regime, including the due dates for filing your corporate tax or how to go about filing and paying corporate tax in Singapore.

3. Income tax for sole proprietorships and partnerships

What is this tax, and who/what does it apply to?

Unlike companies which are liable to pay corporate tax on their profits, partnerships and sole proprietorships do not have to pay corporate tax. This is because, unlike companies which are taxed at the business/entity level, the owners of partnerships and sole proprietorships are taxed at the personal level. Therefore, a partner or sole proprietor is liable to pay a tax on their share of the profits as part of their personal income, and at their personal income tax rates (discussed above).

The following table summarises the key and relevant differences between sole proprietorships, partnerships, and companies:

Type of  Business Entity	Sole-Proprietorship	Partnership	Company
Definition	A business owned by one person.	An association of two or more persons carrying on business in common with a view to profit	A business form which is a legal entity separate and distinct from its shareholders and directors
Legal status	Not a separate legal entity	Not a separate legal entity	A separate legal entity from its members and directors
Ownership	Owned by the sole proprietor	Owned by the partners	Owned by its shareholders
Profit Sharing	Profits are enjoyed solely by the sole proprietor	Profits are shared by the partners	The directors manage the company, and decide how much profits to split among the shareholders
Taxes	Profits taxed at owner’s personal income tax rates	Profits taxed at partners’ personal income tax rates	Profits taxed at corporate tax rates

You may wish to read our other article to find out more about the differences between sole proprietorships, partnerships, and companies.

What are the applicable tax rates?

As the owners of partnerships and sole proprietorships are taxed at the personal level, the applicable income tax rates are the same ones that apply to the individual as set out in the section above on personal income tax.

For Both Individuals and Corporate Entities

4. Goods & Services Tax (GST)

What is GST and who/what does it apply to?

GST is a tax that is paid on the consumption of goods or services in Singapore, regardless of whether the goods and services are procured in Singapore or imported into Singapore. 

While the common view may be that only end-consumers (i.e. the consumers of finished products) pay GST, businesses have to pay GST as well as they “consume” goods/services to enable them to carry on their businesses. For example, a customer walking into a shop and buying a hand-crafted leather bag may have to pay GST on the purchase of the leather bag. However, the business will also have to pay GST on the importation and purchase of the raw materials needed for making the leather bag and the services provided by a local advertising firm to publicise the business’ products.

Therefore, rather than focusing on who GST applies to, the better question may be to ask what GST is applied to. GST is applied on goods and services supplied in Singapore. Generally, goods and services can be separated into taxable supplies and non-taxable supplies. Those categories can be further divided into the following sub-categories:

1. Taxable supplies that are taxed at the standard rate;
2. Taxable supplies that are taxed at a zero-rate;
3. Non-taxable supplies that are exempt from taxes; and
4. Non-taxable supplies that are out of the scope of the GST regime.

Circling back to the distinction between end-consumers and businesses, while the latter three sub-categories are technically categorised differently, the effect is the same for the end-consumers, i.e. you do not have to pay GST as an end-consumer. However, there may be differences for the businesses providing the goods or services, as will be elaborated on in the tables below.

Taxable  Supplies	Standard-Rated Supplies	Zero-Rated Supplies
Goods	1) Goods sold domestically, e.g. food sold in a local restaurant 2) Goods below $400 imported from overseas, e.g. items sold by overseas merchants on e-commerce platforms	Goods exported overseas for sale, e.g. sale of locally produced souvenirs to a customer overseas
Services	1) Services provided domestically, e.g. hairdressing services at a local hairdresser 2) Services imported from overseas, e.g. marketing services from an overseas service provider	International services. The full list of services that fall within this classification can be found here, and includes advertising services provided for overseas customers, auto roaming services provided by telecommunications companies etc.

Non-Taxable  Supplies	Exempt supplies	Out-of-scope supplies
Goods	1) Sale and rental of unfurnished residential property 2) Importing and sale of investment precious metals such as gold, silver and platinum in Singapore	1) Sale where goods are delivered from one location overseas to another location overseas 2) Private transactions, e.g. sale of products on Carousell
Services	1) Financial services, e.g. issuing shares and bonds, or providing loans 2) Digital payment tokens, e.g. exchanging crypto tokens like bitcoin for traditional currency like Singapore dollars	Private transactions, e.g. provision of tuition services as a freelance tutor

		What does this mean for consumers?	What does this mean for businesses?
Taxable	Standard-Rated Supplies	GST payable	Businesses will charge GST and can claim the GST incurred by them on business purchases
	Zero-Rated Supplies	No GST payable	Businesses will not charge GST, but can claim the GST incurred by them on business purchases
Non-Taxable	Exempt supplies	No GST payable	Businesses will not charge GST, and cannot claim the GST incurred by them on business purchases
	Out-of-scope supplies	No GST payable	Businesses will not charge GST, and cannot claim the GST incurred by them on business purchases

Businesses whose taxable supplies exceed $1 million must register for GST and can charge and claim GST from the date of their registration. 

As a GST-registered business:

1. You must submit your GST return to IRAS within a month from the end of each prescribed accounting period. This is done on a quarterly basis.
2. You must report both your output tax (i.e. the GST that you charge and collect from customers for goods and services that you supply) and your input tax (i.e. the GST that you incur on business purchases and expenses) in your GST return.
3. If your output tax is greater than your input tax, you must pay the net GST amount to IRAS. On the other hand, if your input tax is greater than your output tax, you will receive the net GST amount from IRAS.

What are the applicable tax rates?

The applicable GST rate with effect from 1 January 2023 is 8%, and will be increased to 9% with effect from 1 January 2024.

What are the penalties for GST evasion?

GST evasion is a very serious office in Singapore. If you are found to have provided IRAS with false, inaccurate or incomplete information about your activities, you may be potentially liable to pay a penalty of 3 times the amount of tax that was evaded, and a fine of up to $10,000 or to imprisonment for a term of up to 7 years, or to both. You may find out more about the laws and penalties for GST evasion and related offences in our other article on the topic.

5. Property tax

What is property tax and who/what does it apply to?

Property tax is an annual tax on property or land ownership that is levied on the owner of the property. Property tax is applicable regardless of whether you are living in the property or renting it out, and even if the property is vacant.

If there are multiple owners of the property, for example if the property is jointly owned by both you and your spouse under your respective names, the allocation of the share of the property tax is a private matter and IRAS can claim the unpaid property tax from any or all of the property owners. On the other hand, if you are the sole owner of multiple properties, you will have to pay property tax on all the properties that you own.

What are the applicable tax rates?

There are two factors that determine the amount of property tax payable by the property owner:

1. The Annual Value of the property; and
2. The prevailing property tax rate, which in turn depends on the property type (i.e. whether it is a residential property or non-residential property), and in the case of residential property, whether the property is owner-occupied (i.e. you as the owner are living in the property) or non-owner-occupied (i.e. you are renting out the property, or the property is vacant).

The amount of property tax payable annually is calculated by multiplying the Annual Value of your property with the applicable property tax rate.

First, the Annual Value of your property is the estimated annual rent of your property if it were to be rented out, excluding furniture, furnishings and maintenance fees. The Annual Value of your property is not based on the actual rental income received but instead, is determined by looking at estimated market rentals of similar or comparable properties. As the Annual Value of your property is reviewed by IRAS on a yearly basis to reflect changes in the property market, you can check the latest Annual Value of your property on the myTaxPortal under “View Property Dashboard”.

Second, the applicable property tax rates for non-residential properties such as commercial and industrial buildings is a flat rate of 10%.  With effect from 1 January 2023, owner-occupied residential properties are taxed between 0% to 23%, and non-owner-occupied residential properties are taxed between 11% to 27%. Where you fall within the range depends on the Annual Value of the property, as set out in the table below.

Owner-occupier residential property tax rates
Annual Value	Property Tax Rate (%) from 1 January 2023
First $8,000 Next $22,000	0 4
First $30,000 Next $10,000	– 5
First $40,000 Next $15,000	– 7
First $55,000 Next $15,000	– 10
First $70,000 Next $15,000	– 14
First $85,000 Next $15,000	– 18
First $100,000 Above $100,000	– 23

Non-owner-occupier residential property tax rates
Annual Value	Property Tax Rate (%) from 1 January 2023
First $30,000 Next $15,000	11 16
First $45,000 Next $15,000	– 21
First $60,000 Above $60,000	– 27

You can also take reference from the IRAS website which sets out the prevailing property tax rates. 

Are there any exemptions?

There are a number of property tax rebate, remission, and exemption schemes available:

1. The government rolls out property tax rebates from time to time, depending on the social outcomes that they are seeking to achieve. For example, in 2023, all owner-occupied residential properties will be eligible for a property tax rebate for the year, which will be automatically computed and reflected in your property tax bill. The property tax rebate is 60% of the property tax payable for the year 2023, and is capped at $60.
2. Owners of residential property who demolish their houses to rebuild a new house can apply for property tax remission for a period of 2 years from the submission of the building plans to the Building and Construction Authority (BCA). Those who qualify will continue to pay the lower owner-occupied residential property tax rates during the construction period, as opposed to the non-owner-occupied residential property tax rates.
3. Owners of land under development may also qualify for property tax remission for a period of 2 years from the submission of the building plans to the Building Authority, if the plan is to build a house in which to live.
4. Owners of property used for charitable purposes, for public religious worship, or as a public school are exempted from paying property taxes.

6. Stamp duty and Additional Buyer’s Stamp Duty (ABSD)

What is stamp duty and who/what does it apply to?

The three most common types of stamp duties in Singapore are the duties payable on the sale and purchase of properties in Singapore. These apply to both residential and non-residential properties:

1. Buyer’s stamp duty: Payable by the purchaser on the purchase of properties in Singapore.
2. Additional Buyer’s Stamp Duty (ABSD): Payable by the purchaser on the purchase of additional properties in Singapore.
3. Seller’s stamp duty: Payable by the seller on the sale of properties in Singapore.

One thing to take note of is that outside of the context of immovable properties (i.e. buildings or houses), stamp duty is also payable if you are looking to purchase shares in a company. You can refer to this article for how stamp duty applies when buying a Singapore company.

What are the applicable tax rates?

Buyer’s stamp duty is calculated based on the purchase price of the property or the market value of the property, whichever is higher. As of 20 February 2018, the applicable rates are as follows:

Purchase Price or Market Value of the Property	Buyer’s stamp duty rates (%) for residential properties	Buyer’s stamp duty rates (%) for non-residential properties
First $180,000	1	1
Next $180,000	2	2
Next $640,000	3	3
Remaining Amount	4	3

ABSD is also calculated based on the purchase price of the property or the market value of the property, whichever is higher. As of 9 May 2022, the applicable rates are as follows:

Profile of Buyer	ABSD Rates on or after 9 May 2022
Singapore Citizens (SC) buying first residential property	Not applicable
SC buying second residential property	17%
SC buying third and subsequent residential property	25%
Singapore Permanent Residents (SPR) buying first residential property	5%
SPR buying second residential property	25%
SPR buying third and subsequent residential property	30%
Foreigners (FR) buying any residential property	30%
Entities buying any residential property	35%
Housing Developers buying any residential property	35% (plus additional 5% (non-remittable))
Trustee buying any residential property	35%

The IRAS website provides a more detailed explanation of the ABSD Rates and Computation, or you may also refer to our guide to buyers’ stamp duty in Singapore for a more digestible summary.

There are many factors involved in the calculation of seller’s stamp duty, which involves a determination based on:

1. The property type (i.e. residential or non-residential property);
2. The date of the purchase or acquisition; and
3. The date of the sale or disposal, all of which affect the applicable rates.

You can visit the IRAS website to view the latest applicable rates for residential properties and non-residential properties.

Penalties for tax evasion

In Singapore, tax evasion occurs when a person intentionally gives IRAS false or incomplete information to illegally reduce their tax liability and/or obtain undue tax credits and refunds. 

If you are found guilty of tax evasion, you will be liable to a penalty of 3 times the amount of tax undercharged and/or the amount of tax benefit obtained. This is in addition to a fine of up to $10,000 and/or a jail term of up to 3 years. 

If you had no intention to evade taxes, but still mistakenly provided IRAS with incorrect information about your tax liability, you will be liable to a penalty of 2 times the amount of tax undercharged and/or the tax benefit obtained, a fine of up to $5,000 and/or a jail term of up to 3 years. One example of this is where as a private tutor or private hire car driver, you mistakenly declare your income as “employment” in your annual income tax return, when you should have declared your income as “trade income” under “Trade, Business, Profession or Vocation”. Other examples of common filing mistakes to avoid when filing your personal income tax return can be found on the IRAS website.

For more information about the penalties for tax evasion, including how tax evaders are sentenced in Singapore or how to report suspected cases of tax evasion, you can read more in our article on tax evasion in Singapore.

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As an individual in Singapore, the most common types of taxes that you will have to pay are personal income tax, Goods and Services Tax, property tax, and stamp duties. As a corporate entity, instead of personal income tax, you can expect to pay corporate tax and income tax (for sole-proprietorships and partnerships), but may also be liable to pay Goods and Services Tax, property tax, and stamp duties, depending on whether you consume goods and services, or if you purchase and own property. As outlined in the article above, you may be liable for tax evasion and/or mistakenly furnishing IRAS with incorrect information even if you had no intention of evading taxes.

If you run a business and wish to obtain advice on corporate tax-related issues, you may wish to contact a corporate tax lawyer in Singapore. A corporate tax lawyer can provide you with the necessary advice, including on how to go about completing your tax filings, calculating your tax liabilities, or whether there are any exemptions applicable to your business.

If you have been charged with tax evasion offences, you may wish to consult a criminal defence lawyer. The lawyer can advise you on your next steps and, if necessary, represent you in court to seek a fair outcome for your case.

For all other tax-related matters or advice, you can also make a general enquiry with our Find a Lawyer service for a quick consultation.