Examples of Withholding Tax calculations for fees, airfare and accommodation for non-resident public entertainers.

Example 1: Tax Paid by Non-Resident Public Entertainer

A non-resident public entertainer was engaged by a payer to perform in Singapore for 20 days.

Besides artiste fees of $5,000, he was also provided with hotel accommodation at $200 a day. Cost of airfare of $1,500 was borne by the non-resident public entertainer.

Assuming the income is due and payable to the non-resident public entertainer on 24 Feb 2020, his tax liability of $350 is computed as follows:

Artiste fees

$5,000

Hotel accommodation provided (60 days or less in a calendar year)

NIL (Not Taxable - Concession)

Less airfare paid by the non-resident public entertainer

$1,500 (Deductible - Concession)

Taxable Gross Income

$3,500

Withholding Tax @ 10%*

$350

*The withholding tax rate is 10% if the income for the services performed in Singapore is due and payable during the period from 22 Feb 2010 to 31 Mar 2022 (both dates inclusive).

Example 2: Tax Borne by Payer

If the payer bears the tax for the non-resident public entertainer under contractual terms (i.e. payment to payee is treated as net of tax), the withholding tax would be computed on a re-grossed basis.

If the income is due and payable on 24 Feb 2020, the withholding tax of 10% would apply:

Artiste fees

$3,500

Add: Tax allowance $3,500 x 10/90

$388.89

Taxable Gross Income

$3,888.89

Withholding Tax @ 10%

$388.89

Example 3: Other Income received by Non-Resident Public Entertainer

A foreign sports personality was invited by a Singapore company to grace the event and participate in a public marathon on 12 Apr 2020.

He won the marathon and received the prize money of $50,000. For his appearance, he was paid a fee of $10,000. His airfare and cost of two-day stay at the hotel was borne by the company.

The company (payer) is required to withhold tax as follows:

Prize money

$50,000

Appearance fees

$10,000

Hotel accommodation provided (60 days or less in a calendar year)#

NIL (Not taxable - Concession)

Airfare provided

NIL (Not taxable - Concession)

Taxable Gross Income

$60,000

Withholding Tax @ 10%*$6,000

# As his period of engagement was 60 days or less in 2020, the accommodation provided is not taxable.

*The withholding tax rate is 10% if the income for the services performed in Singapore is due and payable during the period from 22 Feb 2010 to 31 Mar 2022 (both dates inclusive).

FAQs

#1 Calculating Withholding Tax

How do I calculate the Singapore tax payable?

The payer is required to withhold tax at 15% of gross income [or 10% if the income is due and payable to you during the period from 22 Feb 2010 to 31 Mar 2022 (both dates inclusive)] for services performed in Singapore. Please refer to Example 1.

Scenario 3: Remuneration received in the capacity as a board director and executive director

Receive director's remuneration in the capacity as a non-resident director and employment income as an executive director of a company which is a tax resident in Singapore.  

The remuneration is as follows:

Salary received as managing director$ 5,000 per month
Remuneration received as board director$10,000 approved on 3 Jun 2020
 $15,000 approved on 2 Dec 2020

 

Employer's Obligations:

(a) Withhold tax

(i) Remuneration received as board director of $10,000 approved on 3 Jun 2020

  • withhold and remit tax of $2,200 ($10,000 @ 22%) by e-filing the withholding tax by 15 Aug 2020 as the physical presence of the director in Singapore was less than 183 days from 1 Jan 2020 to 3 Jun 2020. Confirmation of Payment (CP) letter will be issued to the employer.

 

(ii) Remuneration received as board director of $15,000 approved on 2 Dec 2020

Whether tax needs to be withheld depends on the period of physical presence of the director.

Example 1 - Board director's physical presence in Singapore was less than 183 days in a calendar year when the director's remuneration was declared (i.e. 1 Jan to 2 Dec 2020)

Example 2 - Board director's physical presence in Singapore is at least 183 days in a calendar year when the director's remuneration was declared (i.e. 1 Jan to 2 Dec 2020)

  • No tax need to be withheld

 

(iii)  Salary as managing director of $60,000 for year 2020

  • Withholding tax is not applicable

 

(b) Prepare Form IR8A and seek tax clearance

  • Prepare Form IR8A to report
    • director's remuneration of $25,000 received in the capacity as a board director and
    • salary of $60,000 received in the capacity as a managing director
  • Give the Form IR8A to the employee by 1 March 2021 for their tax filing. For e-submission of Form IR8A, the 'S45 indicator' on the IR8A screen must be checked if tax has been withheld on the director's remuneration/fees  
  • Seek tax clearance to settle the income tax when the employee decides to cease employment as an executive director.

 

Director's Obligations: