Royalty

Royalty earned in Singapore is taxable. Royalty is the income received for the rights to use:

 

  • Copyrights;
  • Patents; and 
  • Trademarks and etc.

 

Earned in Singapore

Royalty is earned in Singapore if it is:

  1. paid directly or indirectly by a person resident in Singapore or by a permanent establishment in Singapore; or
  2. deductible against any income earned in or derived from Singapore.

When Royalty is Taxable

Royalty is taxable in the year it is due and payable.

Qualifying for Tax Concession

To qualify for the tax concession, the royalties must be received for:

  1. any literary, dramatic, musical or artistic work; or
  2. approved intellectual property or approved innovation.

If you qualify, you will be taxed on the lower of:

  1. amount of royalties after allowable deductions; or
  2. 10% of the gross royalties.

The tax concession does not apply to royalties or payment received for any work published in any newspaper or periodical. Also, it will no longer apply to approved intellectual property or approved innovation from the Year of Assessment 2017.

David received royalty of $3,000 from publishing his book in 2018. The taxable amount of royalty for YA 2019 is 10% of the gross royalty which is $300 ($3,000 x 10%).

If he also claimed allowable expenses of $2,800 in 2018:

10% of gross royalty = $300

Net royalty after expenses = $200 (i.e. $3,000 - $2,800)

As the net royalty after allowable expenses is lesser, the amount of $200 will be brought to tax in YA 2019.

Serene writes articles on health-related issues for a local newspaper and she receives royalty income of $3,000 in 2018. She will be taxed on the full amount of $3,000 in YA 2019.

Reporting Royalties

You must declare the amount of gross royalties received under 'Other Income' in your tax form, and provide details of the royalties and statement of expenses incurred (if any).

If you qualify for tax concession, you should also provide us with details on the sources of your royalties, with the supporting documents. Send us the details by email.

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