Singapore Withholding Tax

Singapore withholding tax (known as tax deduction at source in other countries) refers to the tax withheld and paid to the Inland Revenue Authority of Singapore (IRAS), when a non-resident company or individual derives an income from a Singaporean source, for services provided or work done in Singapore. IRAS is the Singapore’s tax authority.
When a Singapore company or individual pays a non-resident for services performed in Singapore, a percentage of that payment must be withheld and paid to IRAS – hence the term withholding tax.
In what situations does Singapore withholding tax apply?
Singapore withholding tax is only applicable to non-resident companies or individuals for:
  • Income derived from a Singaporean source
  • Services provided or work done in Singapore
  • Specific types of payments
Do note that under Singapore tax law, income includes wages or allowances as well as accommodation, airfare and other expenses which are incurred on top of actual service fees.
What types of payments are subject to Singapore withholding tax?
  • Interests, commissions, and any other debt- or loan-related fees

Singapore withholding tax applies to interest charged on overdue trade accounts, interest on credit terms paid to a non-resident supplier, and commission or loan fees that are paid to a non-resident.

  • Royalty, rights of use, and intellectual property

Royalties are subject to Singapore withholding tax at either 10% or at the prevailing corporate rates. Withholding tax also applies to any payments involving the use of commercial, scientific, technical or industrial knowledge for business activities, or the hiring of non-resident experts to render these skills on your behalf.

  • Management fees (prevailing corporate tax rate)

Singapore withholding tax may apply to payments due to foreign entities that provide management services or help you manage your business. These fees are subject to certain conditions, such as double taxation agreements and if your company is permanently established in Singapore or otherwise.

  • Services rendered (prevailing corporate tax rate)

Singapore withholding tax payment made to non-resident companies is subject to Singapore withholding tax when you hire them to install equipment, provide technical support, provide training and consultancy services, and other similar services within Singapore. Do note that remotely-provided services are not subjected to withholding tax.

  • Rent

Rent or payments paid to the non-resident company for movable property will be subject to Singapore withholding tax.