Withholding Tax in Singapore is Crucial

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In Singapore, a withholding tax is a very crucial tax which is applicable when doing business with foreigners. The taxation act of Singapore stipulates that whenever a resident or individual makes payment to non-local enterprises or people then a portion of the money is taken and given to the Singapore Inland Revenue Authority (IRA).
Withholding tax is applicable to numerous types of payment in Singapore. All these payments are mentioned under section 45 of the Singapore tax act. As such all payments listed under this section must comply with withholding tax. Some of the disbursements highlighted under section 45 include foreign companies, professionals, artists who perform in public, and directors.
Detailed explanation of the types of payments subjected to withholding tax
Doing financial business with non-resident professionals
Foreign professionals are experts from a given field who opt to practice they profession autonomously for at most 183 days a year under a service contract. People categorized as foreign professionals include foreign representatives, specialists, consultants and permanent workers of a non-resident firm. In this case 15% of the gross salary is taxed and remitted by the employer to IRA. Alternatively if the foreign professional decides to be taxed on net income, then 20% is withheld as the non-resident tax. Note that the 20% is only applicable when tax is made on the net and not gross income.
Payments made to foreign public performers or entertainers
Entertainers are classified into two the usual public artistes and sportsmen or women. Public artists comprise musicians, singers, actors and dancers while sports people include mostly athletes. A foreign entertainer or performer will only be considered non-resid...

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...mercial knowhow. Lastly, another 15% is paid as rent for business premises and utilization of any other movable property.
Conclusion
Normally, the withholding tax is remitted on the 15th of the month after the date of payment. For instance, if a transaction was carried out on the 24th of June 2013, then the IRAS should receive the withholding tax by 15th of July 2013. Payments should be confirmed 21 days after the payment and form IR37D (http://www.iras.gov.sg/irasHome/uploadedFiles/Businesses/Withholding_tax/Form%20IR37D (1).xls) is received. Later a confirmation of payments (CP) letter will be given to you. Note that, form IR37D has to be completely filled in. Not duly filling the IR37D form can interfere with the procedure of delivering the confirmation letter. As such, the receipt of confirmation of payments is determined by how well the IR37D form is filled.

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