Last updated
Withholding tax in Singapore is tax that the payer deducts from certain payments to non-residents and pays to IRAS. The rate depends on the type of payment, for example 15% on interest and 10% on royalties. Dividends carry none. Checked . If your company pays someone abroad, check this before you send the money.
Which payments are covered?
IRAS says a person must withhold tax when a payment of a specified kind is made to a non-resident company. The covered types are:
- Interest, commissions or fees tied to a loan or indebtedness.
- Royalties and payments for the right to use movable property.
- Payments for scientific, technical, industrial or commercial knowledge, or for assistance in applying it.
- Management fees.
- Rent or other payments for the use of movable property.
- Payments for real property bought from a non-resident property trader.
- Payments from structured products, and REIT distributions.
Interest applies even if it is part of the seller's trade income, for example interest charged on a late payment for goods. Software payments have their own IRAS guidance.
What are the rates?
| Payment to a non-resident company | Rate |
|---|---|
| Interest, commissions, fees on a loan | 15% |
| Royalties and lump sums for use of movable property | 10% |
| Know-how, scientific, technical, commercial knowledge | 10% |
| Rent of movable property | 15% |
| Technical assistance, service and management fees | Prevailing corporate income tax rate |
| Royalties to an author, composer or choreographer | 24% |
For people rather than companies:
| Payment | Rate |
|---|---|
| Non-resident director | 24% |
| Non-resident professional | 15% on gross income or the prevailing non-resident individual rate on net income |
| Non-resident public entertainer | 15% on gross income |
A non-resident company that wants to claim deductions against service income can submit certified accounts and a tax computation to IRAS. Any tax withheld above the corporate tax on the net income is refunded. A tax treaty can lower these rates. See double tax agreements.
Which payments carry no withholding?
IRAS lists payments that are not subject to the tax. The main one is dividends, since Singapore does not impose withholding tax on them, even where a treaty names a rate. Payments for satellite capacity and, generally, for international submarine cable capacity are also outside the tax. Interest paid to a Singapore branch of a non-resident company is an exception, and so are certain payments by banks and finance companies for their own business. Read the IRAS pages for the full list before you rely on an exception.
When must you file and pay?
You file Form S45 and pay by the 15th of the second month from the date of payment to the non-resident. For GIRO payers, the deduction happens on the 25th of the month the tax is due. The date of payment is the earliest of three dates: when the payment is due under the contract or invoice, when it is credited to the non-resident's account, and when it is actually paid. For directors' fees there are separate rules.
You must file even if the payment is exempt under a double tax agreement.
Example from IRAS: a gross royalty of S$10,000 paid on 7 April carries tax of S$1,000 at 10%. It is due by 15 June.
What is the penalty for late payment?
- 5% of the tax if it is not paid by the due date. On the example above that is S$50.
- If the tax remains unpaid 30 days after the due date, IRAS may add 1% per completed month, up to 15% of the unpaid tax.
- IRAS may also appoint agents such as your bank to recover the tax, or take legal action.
What does the payer need to do first?
- Identify the type of payment and the recipient's residency.
- Check the IRAS applicability guide and any treaty relief.
- Deduct the tax at the right rate from the payment.
- File Form S45 and pay by the due date.
- Keep records of the invoice, the payment and the filing.
Residency of the recipient matters. See tax residency for how IRAS decides it. An accountant or tax agent usually files the S45. See accounting services.
Sources
- Types of payment and withholding tax rates from IRAS, used for every rate.
- Payments that are subject to withholding tax from IRAS, used for the covered types.
- Payments that are not subject to withholding tax from IRAS, used for dividends and the other exemptions.
- Filing and payment due date from IRAS, used for the due date, GIRO date and date of payment.
- Late payment or non-payment of withholding tax from IRAS, used for the penalties and the S$10,000 example.