Types of Payment & the Applicable Withholding Tax Rates

A person must withhold tax when certain types of payments (e.g interest, royalty, services etc.) are made to the non-resident persons. The rate of withholding tax depends on the nature of payment. 

Withholding Tax Rates for Services, Interest, Royalty, Rent of Movable Properties,etc.

Nature of IncomeTax Rate
Interest, commission, fee or other payment in connection with any loan or indebtedness15% 1
Royalty or other lump sum payments for the use of moveable properties10% 1 2
Royalty and other payment made to author, composer or choreographer 22% 2
Payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information10% 1 2
Rent or other payments for the use of moveable properties15% 1
 

Technical assistance and service fees

Prevailing Corporate

Tax rate 3 5

Management fees 

Prevailing Corporate

Tax rate  3 5

Time, voyage and bareboat charter fees for charter of aircraftsApplicable aircraft charter rates
Time, voyage and bareboat charter fees for the charter of shipsNil
Proceeds from sale of any real property by a non-resident property trader15%
Distribution of taxable income made by REIT to unitholder who is a non-resident (other than an individual)10% 4

 

Withholding Tax Rates for Non-Resident Directors, Professionals, Public Entertainers and International Market Agents

Nature of IncomeTax Rate
Payment to Non-Resident Director  22% (20% prior to Year 2016)
Payment to Non-Resident Professional/Foreign Firms (Unincorporated)15% on gross income or prevailing non-resident individual rate on net income
Payment to Non-Resident Public Entertainer 10% on gross income (till 31 Mar 2020)
Commission/Payment to Non-Resident International Market Agent3%

 

1These withholding tax rates apply when the income is derived by the non-resident person through operations carried on outside Singapore.  They are to be applied on the gross payment. The resulting tax payable is a final tax. The following tax rates apply on gross payments when operations are carried out in Singapore:

  • Non-resident person (other than individuals): Prevailing Corporate Tax Rate

  • Non-resident individuals: 22% (20% for period of engagement prior to 1 Jan 2016). This does not apply to scenario in footnote 2.

2The reduced withholding tax rate of 10% applies to payments due and payable on or after 1 Jan 2015. However, this does not apply to the royalty payment for an author, a composer or a choreographer.

  • Royalty payment for an author, a composer or a choreographer
    The prevailing tax rate of 22% shall apply to the deemed income (i.e net income or 10% of the gross royalties, whichever is lower). For details, please refer to Tax Concession for Royalty

3For non-resident company, withholding tax is based on the prevailing corporate tax rate for the year when the services were provided (period of payment), even if payment to the non-resident is made in a different year. For example, if the service was provided in Dec 2018 but payment was made in 2019, the prevailing corporate corporate tax is that for 2018 (Year of Assessment 2019), which is 17%.  

4 The reduced withholding tax rate of 10% applies to distributions made during the period from 18 Feb 2005 to 31 Mar 2020 [Section 43(3B) of the Income Tax Act]. Withholding tax does not apply to any distribution made by a REIT where tax has already been paid, on the income from which the distribution is made, by the trustee of the trust [Section 45G(4) of the Income Tax Act].

New!In Budget 2019, to continue to promote the listing of REITs in Singapore and strengthen Singapore’s position as a REITs hub in Asia, the Minister for Finance extended the reduced withholding tax rate of 10% on distributions made by a REIT to qualifying non-resident non-individual unit holders during the period from 1 Apr 2020 to 31 Dec 2025.

A qualifying non-resident non-individual unit holder is one who:

 (a) does not have any permanent establishment (“PE”) in Singapore; or 

(b) carries on any operation in Singapore through a PE in Singapore, where the funds used by that unit holder to acquire the units in that REIT are not obtained from that operation.

    If tax has been deducted in error at the prevailing corporate tax rate from the distributions made to nominees whose beneficiaries are any of the persons listed below, the Comptroller will refund the tax over-deducted to the trustee of REIT directly on a quarterly basis. The beneficiaries^ may be any of the following:

    • qualifying individual;
    • qualifying non-resident non-individual;
    • charity registered under the Charities Act (Cap. 37) or established by any written law;
    • town council;
    • statutory board;
    • co-operative society registered under the Co-operative Societies Act (Cap. 62); or
    • trade union registered under the Trade Unions Act (Cap. 333).

    ^ Do not include a person acting in the capacity of a trustee. 

    The trustee,in turn will refund the amount to the nominees who will then refund it to the beneficiaries. For this purpose, the trustee is required to send its request for refund with all the original subsidiary income tax certificates on a consolidated basis. Please send your request to:

    Revenue & Payment Management Branch
    Inland Revenue Authority of Singapore
    55 Newton Road
    Revenue House
    Singapore 307987

    5 Tax refund under S46 of ITA for payments withheld at prevailing corporate tax rate

     

     

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