Taxable Period:
The tax year in Singapore is the calendar year. An individual’s income from a preceding calendar year is assessed to tax in the following calendar year (i.e. year of assessment).
Tax Returns:
Each taxpayer is required to make an annual return of income and of such particulars as may be required to determine the personal reliefs and deductions.
The tax return must be filed on a calendar-year basis and must be submitted by 15 April. If filed electronically, the deadline is 18 April.
Payment of Tax:
In Singapore, once you get a tax assessment notice, you must pay the assessed tax within one month, even if you disagree and file an objection with the tax authorities.
The notice of objection must be lodged within 30 days of the date of the notice of assessment, failing which the assessment will be treated as final.
In the case of an employee, the tax authorities will, upon application, generally allow the payment of tax by monthly instalments with no interest, using the Interbank GIRO system (an interbank fund transfer system).
Clearance for Foreigners:
Singapore doesn’t deduct taxes directly from employees’ pay checks, i.e. Singapore does not have payroll withholding taxes.
When a non-Singaporean employee stops working in Singapore, gets sent overseas, or leaves the country for more than three months, the employer must:
Tell the Singapore tax authorities about the employee’s departure as soon as they know.
Hold back any money owed to the employee until the tax authorities give tax clearance—unless the employer is fully covering the employee’s Singapore taxes.
The notification must be made no later than one month prior to the date of cessation/departure.
Foreigners are also subject to tax on unexercised/unvested stock options/awards on a deemed gain basis when they cease employment or leave Singapore.
As a concession, tax clearance need not be obtained in the following scenarios:
The employee is a Singapore permanent resident who is not leaving Singapore permanently. The employer should obtain a Letter of Undertaking from the employee stating that the employee has no intention to leave Singapore permanently after cessation of employment with the company. This administrative concession does not apply to overseas postings.
he employee is a non-Singapore citizen who:
worked for 60 days or less in a calendar year (this excludes company directors and public entertainers)
worked for 183 days or more within a calendar year and earned less than SGD 21,000 annually
entered Singapore on or after 1 January 2007 and worked for 183 days or more within a continuous period straddling two years and earned less than SGD 21,000 annually (this excludes company directors and public entertainers)
worked for three continuous years or more and earned less than SGD 21,000 annually
transferred to another company in Singapore due to a company merger, a takeover, or restructuring or posting within the same group of companies, or
is away from Singapore for three to six months for training, business purposes, or overseas posting incidental to one's Singapore employment (subject to conditions).
Tax Audit Process:
The tax authority is the Inland Revenue Authority of Singapore (IRAS).
It adopts a risk-based approach to identifying compliance risk, with a focus on improving the behaviour of taxpayers who pose a higher risk of non-compliance.
The Singapore tax authorities also prioritise and tailor specific compliance programmes that aim to identify taxpayers who have made mistakes in their tax returns, create an audit presence in the community to deter non-compliance by other taxpayers, educate taxpayers on their tax obligations and how to comply with these, and identifying areas of tax law, policies, and processes where the tax system can be simplified.
Statute of Limitations:
The statute of limitations is four years from the year of assessment. It does not apply where there has been fraud or wilful default by the taxpayer.