Your personal tax guide for 2013 in Singapore

For a little island that has lead the world in economic performance being the No. 1 city with the best investment potential, Singapore’s personal income tax rates are unusually low.

Its rates remain amongst the lowest, along with Hong Kong and Macau, even as the global average rate increased in 2012.

KPMG's latest Individual Income Tax and Social Security Rate Survey 2012 showed that the global average top personal income tax rate increased by 0.3 per cent, only the third time that an increase has been observed over the past 10 years.

Here is a guide to let you in on the basics of personal income tax rates in Singapore.

Who are tax residents?

You are considered a tax resident for a particular Year of Assessment (YA) if you have been in Singapore for 183 days or more. If you are a resident:

• You will be taxed on all income earned in Singapore;
• Your income, after deduction of tax reliefs, will be taxed at progressive resident rates;
• Your foreign-sourced income brought into Singapore on or after 1 Jan 2004 is tax exempt;
• You are required to fill in Form B1 (Income Tax Return for Resident).

Tax rates for residents

Revised rates

From 2012 onwards, a personal tax rebate of up to a maximum of $1,500 is granted as follows:

• 30 per cent rebate for taxpayers below 60 years of age as at 31 December 2012;
• 50 per cent rebate for taxpayers 60 years of age and above as at 31 December 2012.

Who are non-tax residents?

You are considered a non-resident for a particular Year of Assessment if you are a foreigner who stayed or worked in Singapore for less than 183 days in the previous year.

Non-residents are not eligible to claim personal tax reliefs and income is assessed to tax depending on the types of income.

If you are a non-resident, your employment income is taxed at 15 per cent or the resident rate, whichever gives rise to a higher tax amount. Director fees, consultant fees and all other incomes are taxed at 20 per cent.

Tax rates for non-resident individuals

Your employment income is taxed at 15 per cent or resident rate, whichever gives rise to a higher tax amount.

The director's fees, consultation fees and all other income that you received will be taxed at 20 per cent from 2006 onwards.