Withholding Tax for Non-Singaporeans SRS Account Holders
What should an SRS operator do?
If you are a foreigner or Singapore Permanent Resident (SPR) and have applied to withdraw from your SRS accounts, 50% or 100% of the withdrawn amount, depending on the type of the withdrawal will be subject to a withholding tax.
The SRS Operator will:
a) Withhold an amount of tax at the prevailing non-resident tax rate of 20% at the point of withdrawal. This amount will be remitted to IRAS.
b) Deduct a 5% penalty on premature withdrawals. The 5% penalty is non-refundable and is separate from the withholding tax.
c) Electronically transmit the information on the withdrawal to IRAS immediately.
Withholding Tax for Singaporean SRS Account Holders
There is no withholding tax on withdrawals made by Singaporean account holders.
How to Calculate Tax Payable
How is withholding tax computed?
E.g. If you have $200,000 in your SRS account by the retirement age of 62 and decide to withdraw the whole amount, you will be taxed on half of the amount withdrawn under the 50% tax concession rule.
|Amount subject to tax
||= 50% x $200,000 = $100,000
|Withholding tax at 20%
||= 20% x $100,000 = $20,000
|Actual amount received
||= $200,000 - $20,000 = $180,000
Is withholding tax a final tax?
No. If you are a Singapore tax resident, the actual tax payable on your SRS withdrawal will be based on the progressive resident rates. If you are not a Singapore tax resident, the actual tax payable on your SRS withdrawal will be 15% or the progressive resident rates, whichever is higher.
How do I claim a refund of the withholding tax?
Tax withheld on the withdrawal is a tax credit that will be used to offset your actual tax liability. Any unused tax credit will be refunded to you.
To illustrate, suppose that in the above example, the actual tax rate applicable for the SRS withdrawal is finally determined to be 15%. The actual tax payable on the SRS withdrawal (of $200,000) will be 15% x $100,000 = $15,000. Also, assume that you have no other tax liability; you will receive a refund of $5,000 (which is $20,000 - $15,000) when we process your annual tax return.
What you need to do when you seek tax clearance?
When you seek tax clearance, you have to obtain a standardised SRS Statement of Contribution/Withdrawal (for tax clearance) (77KB) from the SRS Operator who will undertake to withhold tax at the prevailing non-resident tax rate should you need to withdraw the current year’s SRS contribution within the year of tax clearance.