Tax Reliefs for Foreigners in Singapore

Singapore is known worldwide for its efficient and competitive tax system, which allows businesses and entrepreneurs to benefit from low tax rates and a variety of tax relief options. Corporate taxes, personal taxes, withholding taxes, goods and services taxes, and property taxes all contribute to the country’s tax revenue. On this page, we’ve compiled a list of tax reliefs available to foreigners in Singapore.

Various Tax Reliefs for Foreigners in Singapore

Qualified foreigners can benefit from various tax reliefs in Singapore, which enable them to significantly reduce taxes imposed on them. However, to be eligible for tax reliefs, they must be tax residents or non-Singapore citizens who are in the country for more than 183 days in a year.

A. Individual Income Tax

Individual income tax rate in Singapore is one of the lowest in the world. Here are key points that every taxpayer in Singapore should know about this tax:

• Singapore has a progressive resident tax rate that starts at 0% and ends at 22% after you earn more than S$320,000.
• There are no capital gains or inheritance tax
• Individuals are only taxed on their earnings in Singapore. With a few exceptions, income received by persons while working abroad is not subject to taxation.
• The tax rules vary depending on the individual’s tax residency.
• Individuals have until April 15 to file their taxes. Income tax is calculated on the basis of the previous year’s earnings.

For more details about Singapore’s individual income tax, please refer to the following guide:

Singapore’s Personal Income Tax Guide for Residents & Non-Residents

Individual income tax reliefs for foreigners in Singapore

Here are some individual income tax reliefs you can claim:

1. Earned Income Relief

If you have taxable earned income from any of the following sources in the preceding year, you are eligible for Earned Income Relief:

• Employment;
• Pension; or
• Trade, business, profession, or vocation.

Earned Income Relief is calculated depending on your age and prior year’s taxable earned income (minus any permitted costs).

*If the amount of taxable earned income is less than the maximum amount that can be claimed, the relief will be capped at that amount.

Those with a permanent physical or mental condition that severely limits their capacity to work will receive a greater Earned Income Relief (as shown in the table below).

Those with a permanent physical condition require assistance in any one of the following six Activities of Daily Living (ADLs):

• Washing or Bathing,
• Dressing,
• Feeding,
• Toileting,
• Transferring, and
• Mobility.

On the other hand, those with a permanent mental condition are impaired in any one of the following three areas of activities:

• Self Care and Activities of Daily Living,
• Compliance with Psychiatric Treatment, and
• Education or Work.

 **If the amount of taxable earned income is lower than the maximum amount claimable, the relief will be restricted to the amount of taxable earned income.

Please note that you do not need to claim Earned Income Relief in your Income Tax Return as it will be automatically granted to you based on your eligibility.

For more information, please visit this page.

2. Central Provident Fund (CPF) Relief for Self-Employed Persons/Employees Who are Also Self-Employed

Self-employed persons who may also be employees are allowed relief on contributions made to their CPF accounts to reduce tax payables. To be eligible, a self-employed individual must have contributed to one or more of the following in the year prior to the Year of Assessment (YA):

• Employee CPF Contributions
• Medisave Contributions 

If you are a self-employed person:

You can enjoy tax relief on your mandatory and voluntary contributions based on whichever is lower: 

• 37% of assessable income,
• CPF annual limit of $37,740, or 
• Actual amount contributed by you.

If you are a self-employed person who is also an employee:

• If your total compulsory CPF contributions as an employee and obligatory Medisave contributions as a self-employed person are less than the CPF relief cap for self-employed persons, your tax relief for voluntary CPF contributions will be capped at the prevailing CPF contribution rate for the year.
• If your total compulsory CPF contributions as an employee and compulsory Medisave contributions as a self-employed person exceed the CPF relief cap for self-employed persons, no tax relief for your voluntary CPF contributions will be allowed because your total compulsory CPF contributions as an employee and compulsory Medisave contributions as a self-employed have exceeded the CPF relief cap.

How to claim this tax relief:

CPF Relief is granted based on the payment date. To be eligible for CPF Relief in the Year of Assessment 2021, you must have contributed by December 31, 2020.

If you make Medisave or voluntary CPF contributions throughout the year, you will automatically be eligible for the relief the following year.

If you are both self-employed and an employee, please use the ‘Medisave Payment Form for Self-Employed’ form to make your own Medisave contributions as a self-employed person.

For more details, please refer to this page.

3. Central Provident Fund (CPF) Relief for Employees

Individuals are provided CPF Relief to encourage them to save for their retirement. CPF Relief is available to employees who are Singapore citizens or permanent residents.

Here are contributions that qualify for relief:

• Compulsory employee CPF contributions under the CPF Act or contributions to an approved pension or provident fund;
• Voluntary contributions to your Medisave Account.

You are not eligible for this relief if your contributions are as follows:

• Voluntary contributions made in excess of the compulsory contributions under the CPF Act;
• CPF contributions on additional wages that exceed the CPF cap on wages from related employers (employed concurrently by two or more related employers in a year); and
• CPF contributions made in respect of your overseas employment (i.e., while you are seconded or posted overseas for work).

Amount of relief:

From January 1, 2022, you can enjoy annual tax relief of:

• up to $8,000 (previously $7,000) when you top up to your own Special/Retirement Account and/or MediSave Account, and
• an additional tax relief of up to $8,000 (previously $7,000) when you top up your loved ones’ Special/Retirement Account and/or MediSave Account.

How to claim this tax relief:

You can claim the CPF Relief for Employees through e-filing using your Singpass foreign user account or paper filing by filling out Form B1 and Form B.

For comprehensive information, please click here. 

B. Corporate Income Tax

Singapore’s corporate tax rate on chargeable income is one of the lowest in the world, enticing business owners from all over the world to establish or grow their operations in the city-state. All companies are taxed at a flat rate of 17% of their chargeable income. This applies to both local and foreign companies.

For more information on Singapore’s corporate income tax, please refer to the following guides:

All You Need to Know About the Corporate Tax Residency in Singapore

An Introduction to Singapore Corporate Tax Filing

Corporate income tax reliefs for foreigners in Singapore

Foreigners working and living in Singapore can claim corporate income tax rebates and exemptions if they are eligible.

Corporate Income Tax Rebates

Corporate income tax rebates are offered to businesses to help them cut expenses and support the reorganization. The rebates also apply to income earned by Registered Business Trusts, non-resident corporations that are not subject to a final withholding tax, and corporations that receive income taxed at a reduced rate. They don’t apply to income earned by a non-resident business that is subject to final withholding tax.

Your company’s chargeable income declared in its Corporate Income Tax Returns (Estimated Chargeable Income (ECI) and Form C-S/ Form C-S (Lite)/ Form C) should not include the rebate as IRAS will compute and allow it automatically.

Rebate percentages and caps

Corporate Income Tax Exemptions

Tax reliefs such as the tax exemption program for new start-up businesses and the partial tax exemption scheme for businesses are available to help businesses lower their tax payments.

Tax Exemption Scheme for Startup Companies

To encourage entrepreneurship and the growth of our local businesses, the tax exemption scheme for startup companies was introduced in the YA 2005.

The following are the tax reliefs available to eligible businesses during the first three years of their existence:

*The term “normal chargeable income” refers to income that will be taxed at the current corporate income tax rate of 17%.

Partial Tax Exemption Scheme for Companies

Unless they are claiming the tax exemption for startup companies, all companies, including companies limited by guarantee, are eligible for partial tax exemption (PTE).

The tax exemptions for qualifying companies are as follows:

How to qualify for the tax exemption scheme

All new startup companies are eligible for the tax exemption scheme, except for the following:

• Companies whose principal activity are that of investment holding,
• Companies that undertake property development for sale, investment, or both.

The startup company must also:

• be incorporated in Singapore,
• be a tax resident of Singapore for that YA, and
• have a total share capital beneficially held directly by no more than 20 shareholders throughout the basis period for that YA, with all shareholders being individuals or at least one shareholder holding at least 10% of the company’s issued ordinary shares.

How to claim the tax exemption

To claim the tax exemption, you must complete the relevant sections of ECI filing and Form C-S/ Form C-S (Lite)/ Form C.

For further information, refer to this page.

C. Withholding Tax

Singapore withholding tax (known as a tax deduction at source in other countries) refers to the tax withheld and paid to IRAS when a non-resident company or individual obtains an income from a Singaporean source for services given or labor done in Singapore.

For more information, please read our Singapore withholding tax guide. 

Tax Relief under the Avoidance of Double Taxation Agreement (DTA)

Singapore has double tax agreements (DTAs) with many countries in order to prevent companies and individuals from being taxed twice. 

If your company  is based in a country that has a tax treaty with Singapore, you may be eligible for tax relief under the DTA. Please, keep in mind that this depends on the particular service your company provides, as well as the specific provisions of the DTA in your country.

How to claim Double Taxation Relief (DTR) for non-residents/foreigners

The taxpayer must submit a Certificate of Residence to the non-resident country, i.e., the country in which the taxpayer does not reside, in order to seek relief under a tax treaty. If you live in Singapore, you must provide confirmation of your Singapore tax residency to the other treaty countries. If you are a tax resident of a treaty country, you must submit a completed Certificate of Residence from Non-Residents certified by the tax authorities of the treaty country to the Inland Revenue Authority of Singapore in order to be exempt from Singapore Income Tax under the DTA.

The relief available under a DTA from a treaty country differs from one DTA to another. In most cases, the Residence State will either give credit to its residents for taxes paid to a non-Resident State or exempt income from taxes if taxes have already been paid to a non-Resident State on that income.

How to claim relief in the absence of DTA

You can avoid double taxation even in the absence of DTA with a particular country. This is because, as discussed in the preceding sections, Singapore’s domestic rules exempt most types of foreign-sourced income (including dividends, foreign branch profits, and foreign-sourced service revenue) from taxation if certain requirements are met. These conditions are:

• The highest corporate tax rate of the foreign country from which the income is received must be at least 15% at the time the foreign income is received in Singapore.
• The foreign income had been subject to tax in the foreign country even though the actual tax rate paid on the income can be different from the headline tax rate.

D. Property Tax

Singapore property tax applies to all properties in the city-state. Private homes, HDB apartments, factories, offices, and vacant land are all included. Property taxes are calculated as a percentage of the property’s annual worth. The annual value is calculated using the projected annual rent that the property could command if rented out. We’ve discussed this topic in ‘A Simple Guide To Property Tax In Singapore.’

Property tax relief for foreigners in Singapore

While the lower tax rate for owner-occupiers is considered a “rebate” by IRAS, the steps to lessen property taxes during the last two years were mostly for commercial properties from January 1 to December 31, 2020. 

Those who have recently purchased land for the construction of an owner-occupied home are eligible for a significant property tax reduction. This is called the “Property Tax Remission for Land Under Development for an Owner-Occupied House” (more details and eligibility criteria are available on this IRAS page). A property tax remission is also available for homeowners who choose to demolish their old home to rebuild a new one.

Property tax exemption

Your building is exempt from property tax if it is used exclusively:

• As a public place of worship
• As a public school
• For charitable purposes
• For purposes that promote the social development of Singapore

E. Goods and Services Tax

The Goods and Services Tax (GST) is a broad-based consumption tax levied on goods imported into Singapore (collected by Singapore Customs) and practically all goods and services supplied in Singapore. GST is also known as Value-Added Tax (VAT) in other nations.

Most financial services, the supply of digital payment tokens, the sale and leasing of residential properties, and the importation and local supply of precious investment metals are all subject to GST exemptions. Exported goods and international services are also not taxed.

More information on Singapore’s GST (and its registration) can be found here.

How to qualify for GST Relief

• Singaporeans and Permanent Residents of Singapore (PRs) residing overseas and returning to resume residence in Singapore
• Foreigners transferring residence or migrating to Singapore

The GST exemption is conditional on the following:

• The person can satisfy Singapore Customs
• The articles and personal effects and personal pets are imported within six months of their first arrival in Singapore.

Click here to find out how to apply for the GST exemption.

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