Balancing obligations from your native land and Singapore is anything but easy. In this blog post, we will try to simplify the complex tax system for expats. It will give you clear insights into the tax structure and strategies for planned tax management.
Whether you have recently moved to Singapore or living there for years, our tax advice for British expats in Singapore will guard you against all kinds of imaginable inconveniences. Being armed with necessary information, you will find it easier to effectively navigate through your tax responsibilities.
Dive in for a simple approach towards fulfilling your tax obligations.
Resident vs. Non-Resident Tax Payers
If you talk about taxation in Singapore, we need to start by explaining the differences between resident and non-resident citizens.
Residents fall under the category of progressive tax rates that range between 0% and 22%. In case of non-residents, a 22% flat rate is imposed. Residents have rights to avail different personal tax deductions and reliefs, which will reduce their tax burden significantly.
Different Types of Tax
The tax system in Singapore is known for its simple yet competitive structure. The city-state determines various tax types, each of which is created to cater to different groups of common people and business establishments.
In the next section, we will delve into the primary tax structure commonly encountered by individuals.
Resident Income Tax
We have already mentioned that the tax system for the residents in Singapore is progressive by nature. The bracketed structure of tax rates determines a no-tax liability for the low-income groups while planning a high slab for the higher income groups.
Non-Resident Income Tax
Non-residents in Singapore have to pay tax at the rate of 22%. It means regardless of their earning, they will be taxed at this flat rate. However, non-resident people are not entitled to any kind of relief or deduction, like their resident counterparts.
Capital Gains Taxes
Singapore imposes no capital gains tax. This means you don’t have to pay any tax on your profits from the sale of your property, bonds or stocks. The absence of capital gains taxes is an attractive feature of the tax structure in Singapore and makes the country an appealing destination for investors.
Property Tax
Homeowners are entitled to progressive tax rates that range from 0% to 16%, depending on the annual value of the property. Properties, which are not left vacant or rented out, are taxed at the rate of 10-20%, which is slightly heavier.
A flat tax rate of 10% is imposed on a commercial space or a piece of land.
For the best tax advice for expats in Singapore, you should consult an experienced professional.