Singapore to Impose New Individual Income Tax Rates in 2017

Singapore’s Inland Revenue Authority has announced that, beginning in 2017, there will be new income tax rates for both resident and non-resident individuals in the country. Many of those affected will see their tax rates increase.

An individual will be considered a tax resident of Singapore for a particular Year of Assessment (YA) if they meet one of the following criteria:

• Is a Singapore Citizen who normally resides in Singapore except for temporary absences; or
• Is a Singapore Permanent Resident (SPR) who has established a permanent home in Singapore; or
• Is a foreigner who has stayed/worked in Singapore (excludes director of a company) for 183 days or more in the previous year.

If the individual does not meet any of the above criteria, then they will be classified as a non-resident of Singapore for tax purposes.

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Singapore’s income tax is set at progressive rates, with higher earning individuals paying more tax. According to the IRAS, the new YA 2017 tax rates for residents will be as follows:

In YA 2017, Singapore will also change the tax rates for non-resident individuals (except certain reduced final withholding tax rates) to 22 percent. The government has stated that their intention is to “maintain parity between the tax rates of non-resident individuals and the top marginal tax rate of resident individuals, which is also being raised by two percent at the same time.”

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In particular, the new rates will impact the following non-residents:

• Non-resident directors will see their tax rates raised from 20 percent to 22 percent
• Professionals will be subject to a rate of either 15 percent of gross income or 22 percent of net income (over the previous 20 percent)
• Non-resident public entertainers are subject to a 10 percent rate

According to the IRAS, the new rates for non-residents will be as follows:

In order to accurately assess your tax burden is it important to consult with a tax expert who is well versed in the intricacies of Southeast Asia tax requirements.

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