A person must withhold tax when certain types of payments (e.g. interest, royalty, services etc.) are made to non-resident persons. The rate of withholding tax depends on the nature of payment.
Withholding Tax Rates
| Nature of Income | Tax Rate |
| Interest, commission, fee or other payment in connection with any loan or indebtedness | 15% 1 |
| Royalty or other lump sum payments for the use of moveable properties | 10% 1 2 |
| Payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information | 10% 1 2 |
| Rent or other payments for the use of moveable properties | 15% 1 |
|
Technical assistance and service fees | Prevailing Corporate Tax rate 3 5 |
Management fees |
Prevailing Corporate Tax rate
3 5 |
| 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) |
| Payment to Non-Resident Director | 22% (20% prior to Year 2016) |
| Commission/Payment to Non-Resident International Market Agent | 3% |
| Time, voyage and bareboat charter fees for charter of aircrafts | Applicable aircraft charter rates |
| Time, voyage and bareboat charter fees for the charter of ships | Nil |
| Proceeds from sale of any real property by a non-resident property trader | 15% |
| Distribution of taxable income made by REIT to unitholder who is a non-resident (other than an individual) | 10% 4 |
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:
2The reduced withholding
tax rate of 10% applies to payments due and payable on or after 1 Jan
2005.
3Withholding 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 2008 but payment was made in 2009, the prevailing
corporate corporate tax is that for 2008 (Year of Assessment 2009), which is 18%.
For payments
made to non-resident individuals, tax is to be withheld at 20% (from 1 Jan 2016, the rate will be increased to 22%) on the gross payment.
4 The reduced withholding
tax rate of 10% applies to distributions made during the period from 18 Feb
2005 to 31 Mar 2020 (Budget 2005 and Budget 2015 refer). From 16 Feb 2007,
withholding tax does not apply to any distribution made by the trustee of the
REIT where tax has already been paid, on the income from which the distribution
is made, by the trustee of the trust (Income Tax (Amendment) Act 2007 refers).
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