A comprehensive guide to Personal Income Tax in Singapore for Foreign Company Owners and Directors In Singapore

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Bestar Services Pte. Ltd
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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore

• When you are a company owner or director, you are
  bounded by a hectic schedule, which results in
  missing out on essential things. Though
  companies businesses taxes are paid on time,
  they miss out on paying Personal Income Tax on
  their salary. In this blog, we will walk you
  through the vital information on paying Personal
  Income Tax and benefits offered by Singapore
  Government on paying taxes.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
What elements are considered for Personal Income
Tax for Company Owners?

• In Singapore, Company or Business owners/founders
  who are foreign, local, resident, or non-resident
  are considered Self-Employed. All of them own a
  sole proprietorship.
• In Singapore, if you are self-employed, you must
  declare your business income as part of your
  Total Personal Income. Therefore, paying your
  Business Income Tax means you are eventually
  paying your Personal Income Tax.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
What elements are considered for Personal Income
Tax for Company Owners?

• Singapore Government gives the advantage to
  Self-Employed individuals by Pre-filling their
  Self-Employed Income, which is considered income
  to the Tax system.
• E.g., if you are running a sole proprietorship
  firm in Singapore that makes around 150,000 in
  profits, you must declare business income every
  year on this amount and pay Personal Income Tax
  on the same amount.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
What elements are considered for Personal Income
Tax for Company Owners?

• Pro Tip If you opt for the Pre-Filling Scheme
  offered by the Singapore Government, then you can
  go to myTax Portal to view all your pre-Filled
  information in the Income, Deductions, and
  Relief Statement (IDRS) section.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
What elements are considered for Personal Income
Tax for Company Directors?

• If you are working as a Private Limited Company
  Director in Singapore, you are entitled to
  receive a monthly salary or remuneration,
  depending on your contract with the company.
• The amount you receive in the form of salary or
  remuneration is considered as your Personal
  Income, and you must pay income tax on your gross
  salary every year. To pay Personal Income Tax on
  your gross salary, you must fill out Form IR8A
  from IRAS (Inland Revenue Authority of Singapore).

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
What elements are considered for Personal Income
Tax for Company Directors?

• On top of the salaries, Company Directors receive
  several benefits from the company, such as
  accommodation expenses, cars, allowances, and
  much more.
• If a Company Director or any other company
  employee is receiving benefits from the
  company/employer, they must file Appendix 8A and
  attach it to Form IR8A.
• E.g., if a Private Limited Company Director
  receives 48,000 in accommodation expenses
  annually from the employer, they must file
  Appendix 8A.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
Which Income is Taxable in Singapore?

• For Company Directors, Owners, and Founders, the
  taxable income is calculated on Gross Income from
  which certain deductions are deducted. The final
  amount after deductions is the actual income on
  which you are taxed.
• Any income that you earn in Singapore is taxable
  income. Any income that you earn outside
  Singapore is taxable only in the following two
  scenarios
• If you receive that income via partnerships in
  Singapore
• If you travel overseas for the work purpose for a
  Singapore company and the income you earned
  overseas.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
Types of Income that a Company Director must pay
in Singapore
There are two types of Income that a Company
Director must pay in Singapore Tax Residency In
Singapore, Company Directors are taxed based on
their Tax Resident Status. The following criteria
must be met to be entitled as a Tax Resident in
Singapore
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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
Types of Income that a Company Director must pay
in Singapore

• Must have stayed or worked in Singapore for at
  least 183 days in a calendar year.
• Must have worked for three consecutive years in
  Singapore.
• Must have worked for at least two calendar years
  in Singapore, provided a total period of stay in
  Singapore before after employment is at least
  183 days.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
Tax Rate for Tax Residents Status Company
Directors

• If the company director is a foreign
  non-resident, the tax rate is flat 22.
• If the company director is a resident, income is
  taxed at a progressive rate.

Income Tax Rate for Resident Company Directors in
Singapore

• Company Directors who are residents- in Singapore
  are taxed at the following progressive tax rates

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
How to File Taxes in Singapore?

• If your personal income is above 22,000 for the
  financial year, then you must file a Personal
  Income Tax Return. You must submit it to the
  Singapore Tax Authority by the 15th of April
  every year. If there is no income in the previous
  years, you must declare Zero income in your Tax
  form.
• It must be submitted to the Singapore Authority
  by the 15th of April via paper or the 18th of
  April via e-filling.
• Note IRAS (Inland Revenue Authority of
  Singapore) will impose penalties on the failure
  of non-filing of Tax, which can be escalated for
  legal actions.

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
How to File Taxes in Singapore?

• There are two ways to submit a Tax return to the
  Singapore Authority online or by mail.
• If you want to submit a Tax return in paper form
  by mail, you must request the Singapore Authority
  to mail you the paper form. However, if you wish
  to submit a Tax return via e-filling, the online
  form is available from the 1st of March every
  year.
• There are three types of Forms for Personal Tax
  Filing

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
How to File Taxes in Singapore?

• Form B1 for Tax Residents individuals
• Form B for Self-Employed
• Form M for Foreign/Non-Residents individuals
• Once you submit the Tax Return to the Singapore
  Authority, you will receive a Notice of
  Assessment/your Tax bill between May and
  September. The tax bill contains the amount that
  you need to pay as Tax. You must pay the tax
  amount within 30 days of receiving the Notice of
  Assessment/Tax bill

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A comprehensive guide to Personal Income Tax in
Singapore for Foreign Company Owners and Directors
Tax Planning While Being In Singapore
Conclusion

• After going through the blog, you will have
  excellent clarity on Personal Income Tax Filing
  for Company owners, founders, and directors.
  However, if you still have any questions, feel
  free to contact us.
• At Bestar Services, we provide Personal Income
  Tax Filing Services for Individuals in Singapore
  for residents and non-residents both. We also
  provide corporate tax compliance advisory
  services and accounting bookkeeping services
  for businesses companies in Singapore, so they
  always pay taxes on time and dont have to worry
  about keeping up with documents for Tax Filing.
  You can contact us via email at admin_at_bestar.asia
  or via call at 65 62994730.

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