Withholding tax is a tax on payments made to non-residents including employees, business partners and overseas agents. Here is a quick overview of withholding tax and how it affects your business. It is not meant to be an in-depth guide on withholding tax.
What Is Withholding Tax?
What Types Of Payment Are Subject To Withholding Tax?
When Must I Pay Withholding Tax?
How Much Withholding Tax Do I Have To Pay?
How Do I Pay Withholding Tax?
Where Can I Get Help?
What Is Withholding Tax?
- When you make payments of a specified nature to a non-resident, you must withhold a certain percentage of that payment as "withholding tax".
- The withholding tax must then be paid to the Inland Revenue Authority of Singapore (IRAS).
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What Types Of Payments Are Subject To Withholding Tax?
- Any payment listed under S45 of the Singapore Income Tax Act.
- Types of payment include:
- payment of commission fees to overseas agents
- payment of director’s fees to non-resident directors
- payment of professional fees to offshore accountants
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When Must I Pay Withholding Tax?
- You must pay the withholding tax by the 15th of the month following the date of payment.
- For instance, if you paid your overseas accountant on 20 April 2009, you must pay the withholding tax to IRAS by 15 May 2009.
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How Much Withholding Tax Do I Have To Pay?
- It depends on the type of payment you are making and who you are paying to.
- For management fees, technical and other service fees paid to a non-resident company, the withholding tax rate is the same as corporate tax rates. The current corporate tax rate is 18%. For payments made to non-resident individuals, tax is to be withheld at 20% of the gross payment.
- For time charter fees, voyage charter fees and bareboat charter fees, the withholding tax rate is 1% - 3%.
- For other types of payments, the withholding tax rate is 10% or 15%.
- Where a double tax agreement is applicable, the rates specified in the agreements of the respective countries would apply.
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How Do I Pay Withholding Tax?
- You must fill up the relevant forms and submit them with payment to IRAS. Here are the main forms that businesses file.
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Getting Help On Withholding Tax
- Visit these websites and web resources for more in-depth information on withholding tax or consult with your accountant.
- You can also contact IRAS:
- Withholding Tax On Foreign Directors
Local Toll-Free: 1800 356 8300
International: (65) 6356 8300
- Withholding Tax On Foreign Professionals / Firms
Local Toll-Free: 1800 356 8300
International: (65) 6356 8300
- Withholding Tax On Non-Resident Companies
Local Toll-Free: 1800 356 8622
International: (65) 6356 8622
Fax: (65) 6351 4360
- Email: enfs45@iras.gov.sg
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