Filing income tax can become a nightmare for certain individuals, and that is why we offer professional tax filing services where we will be doing the hard work for you. But before going there, let’s give you an idea of Singapore income tax rules and regulations.
In Singapore, the majority of people who are employed contribute to the development of the country by paying taxes. The tax filing doesn’t have to be difficult, but it occasionally may be. To make filing your taxes easier, we, one of the most trusted income tax services in Singapore are here with some Q&As.
Who is Obligated to Pay Income Tax in Singapore?
Unless explicitly exempted under the Money Tax Act or by an Administrative Concession, all people who earn, derive, or receive income in Singapore must pay income tax each year, according to IRAS.
In general, the following situations will result in you as a person having to pay tax during any given Year of Assessment (YA):
- Your revenue is derived or received in Singapore.
- Income may come from full-time employment, working alone or as a freelancer, among other things, or from investments in Singapore.
- You are employed by Singapore but are working outside of Singapore.
- You have a yearly gross income of at least SGD 22K; or
- Unless temporarily absent, you are a Singaporean citizen (SC) or permanent resident (SPR) who dwells in Singapore;
- You are a foreign national who resided or worked in Singapore for 183 days or longer in the year before the YA (excluding service as a director of a firm).
What is and isn’t Taxable?
Income may or may not be taxed. Income that is subject to taxation is referred to as taxable income. The taxing procedure does not need consideration of non-taxable income.
Taxable Earnings:
- Employment earnings
- Payment Bonus
- Fee for Directors
- Income from self-employment
- Rental Earnings
Non-Taxable Earnings:
- Windfalls, such as lottery prizes
- Gains from investments in equities and real estate
- Pensions
- Payouts for CPF Life
How much Income Tax must I Pay?
The main principle behind income tax is one’s, income band. The personal income tax rates in Singapore are graduated for taxpayers who are residents. This implies that the highest income tax rate is presently 22% and that the more your income, the higher your tax.
Additionally, taxpayers might anticipate tax reductions. Tax reliefs serve to lower the amount of taxes you must pay and are frequently the consequence of government programs or policies.
You may be eligible for the following typical tax reliefs or deductions in Singapore:
- Parental Support
- Children’s Aid
- Relief for NSman
- School Fee Relief
- Relief from Life Insurance
- Relief for the Central Provident Fund (CPF)
- Relief from the Supplementary Retirement Scheme (SRS)
- Donation deduction
Please be aware that there is a cap on the amount of tax relief you may get; in Singapore, the cap for personal income tax relief is presently set at SGD 80K.
When must I file my Income Tax Return?
Tax returns can be electronically filed through the IRAS website from 1 March through 18 April each year, beginning at the end of the first quarter. For instance, in 2022, you would file taxes for the income you got or generated in 2021 as the assessment is for income earned in the prior year. You must deliver your finished tax form to the IRAS headquarters by April 15 if you prefer paper filing.
Step-by-Step Guide for filing Income Tax:
There are two methods for submitting taxes: electronically and on paper. Most taxpayers use online tax filing. Electronic tax filing is comparatively simple:
STEP 1: Gather the required materials
Be careful you have these available:
- IRAS Unique Account / SingPass (IUA)
- Type IR8A (if your employer is not participating in the Auto-Inclusion Scheme)
- Information about your dependents (such as your parents or children) for new relief claims
- Information about your property’s rental revenue and any other income you may have
- The number for registering a business or a partnership’s tax reference (for self-employed and partners only)
Step 2: Access the myTax Portal
- Log in to the myTax Portal using your IRAS unique account or SingPass (IUA)
- Follow the prompts by clicking Individuals > File Income Tax Return
Step 3: Enter or confirm your information
Enter information about your income, deductions, and relief measures. This information will already be filled in if your organization participates in the Auto-Inclusion Scheme. The information will just need to be verified.
Step 4: Adapt current tax relief measures
Please include your claims if you are eligible for any new or extra tax reliefs, such as relief for a newborn child. You must eliminate any prior claims for relief (such as course costs) for which you are no longer eligible.
Step 5: Declare additional income, if any
Declare your additional revenue sources if necessary (e.g. rental income).
Step 6: Obtain confirmation of receipt
After successfully submitting an e-form, you will get an acknowledgment page. If you can, save or print a copy.
IRAS will mail the pertinent paper tax return to anyone unable to file their taxes online during February and March.
What happens if I don’t file my taxes by the due date?
For submitting taxes late or not at all, you will be charged a composition fee and can have a court date. Composition amount appeals must be submitted online through the myTax Portal and are subject to approval.
Try to file your taxes in advance because IRAS will remind you closer to the due date. Apply for an extension online through the myTax Portal if you require additional time to file your income tax return.
Filing taxes is a necessary aspect of adult life; it may be complicated, but if we are familiar with the system, it becomes simpler.
