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Overview

Withholding tax is the amount a payer deducts from payments of a specified nature (e.g. royalty, interest, technical service fee, etc.) to a non-resident company or individual. This amount must be paid and withheld to the Inland Revenue Authority of Singapore (IRAS).

The rates of withholding tax differ depending on the nature of the payment. The payer must file and pay the withholding tax to IRAS by the 15th of the second month from the date of payment to the non-resident.

 

Who is the non-resident?

• Non-resident company. A company is a non-resident when the control and management of the company are exercised outside Singapore.
• Non-resident individual. An individual who is in Singapore for less than 183 days in a year is considered a non-resident.
• Non-resident professional. A professional is an individual exercising any profession (i.e. a person other than an employee) of an independent nature under a contract for service.
• Non-resident public entertainer. A public entertainer performing in Singapore can be exercising a profession, vocation or employment. Public entertainers include stage, radio or television artistes, musicians and athletes.
• Non-resident director. For tax purposes, a director is a member of the board of directors of a company.

 

Payments that are subject to withholding tax

 

Payments that are subject to withholding tax when paid to non-resident companies:

Payments that are exempt from withholding tax when paid to non-resident companies:

Interest, commissions or fees in connection with any loan or indebtedness Royalties or other payments for the use of or the right to use any movable property Payments for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information Payments of management fees Rent or other payments for the use of any movable property Payments for the purchase of real property from a non-resident property trader Payments made from structured products (other than payments that qualify for tax exemption under Section 13(1)(zj) of the Income Tax Act 1947) Distributions from a real estate investment trust (REIT)

Dividend payments Payments for satellite capacity as payments for services instead of payments for the use of movable properties. Payments for the use of international submarine cable capacity (except for payments made under IRU agreements) as payments for services. Charter payments made to permanent establishments in Singapore All payments (e.g. interest, commission, royalties or management fees) under Sections 12(6) and 12(7) of the Income Tax Act 1947 which are made to Singapore branches of non-resident companies. Banks in Singapore when making Section 12(6) payments to their branches/ head offices outside Singapore or another bank outside Singapore.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accmaster as your tax agent

Accmaster is a group of Accredited Tax Advisers (ATA) and Accredited Tax Practitioners (ATP) who can help you maximize the benefits of business-friendly taxation policies in Singapore. You will have access to our skilled experts who are experienced in your specific industry and up-to-date on various tax and regulatory changes. Our tax services include tax optimization strategy advice and implementation and tax planning and filing.

Filing withholding tax is of high importance because you may face penalties and enforcement actions for late or non-payment, but this task should not take the time that you should have spent on your core business.

Appointing us to do the filing on your behalf will give you peace of mind because we can ensure that your taxes are filed correctly and within the deadline.