Under Singapore law, a person (known as the Payer) who makes payment(s) of a specified nature (e.g. Royalty, Interest, Technical Service Fee, etc.) to a non-resident company or individual (known as Payee) is required to withhold a percentage of that payment and pay the amount withheld(called ‘Withholding Tax’) to IRAS.
Withholding Tax Rates for Services, Interest, Royalty, Rent of Movable Properties,etc.
|Nature of Income||Tax rate|
|Interest, commission, fee or other payment in connection with any loan or indebtedness||15% 1|
|Royalty or other lump sum payments for the use of movable properties||10% 1 2|
|Royalty and other payment made to author, composer or choreographer||22% 2|
|Payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information||10% 1 2|
|Rent or other payments for the use of movable properties||15% 1|
|Technical assistance and service fees||Prevailing Corporate Tax rate 3 5|
|Management fees||Prevailing Corporate Tax rate 3 5|
|Time, voyage and bareboat charter fees for charter of aircrafts||Applicable aircraft charter rates|
|Time, voyage and bareboat charter fees for the charter of ships||Nil|
|Proceeds from sale of any real property by a non-resident property trader||15%|
|Distribution of taxable income made by REIT to unitholder who is a non-resident (other than an individual)||10% 4|
Withholding Tax Rates for Non-Resident Directors, Professionals, Public Entertainers and International Market Agents
|Nature of Income||Tax rate|
|Payment to Non-Resident Director||22% (20% prior to Year 2016)|
|Payment to Non-Resident Professional/Foreign Firms (Unincorporated)||15% on gross income or prevailing non-resident individual rate on net income|
|Payment to Non-Resident Public Entertainer||10% on gross income (till 31 Mar 2022)|
|Commission/Payment to Non-Resident International Market Agent||3%|
1 These withholding tax rates apply when the income is derived by the non-resident person through operations carried on outside Singapore. They are to be applied on the gross payment. The resulting tax payable is a final tax. The following tax rates apply on gross payments when operations are carried out in Singapore:
2 The reduced withholding tax rate of 10% applies to payments due and payable on or after 01 Jan 2005.However, this does not apply to the royalty payment for an author, a composer or a choreographer.
3 For non-resident company, withholding tax is based on the prevailing corporate tax rate for the year when the services were provided (period of payment), even if payment to the non-resident is made in a different year. For example, if the service was provided in Dec 2018 but payment was made in 2019, the prevailing corporate corporate tax is that for 2018 (Year of Assessment 2019), which is 17%.
4 The reduced withholding tax rate of 10% applies to distributions made during the period from 18 Feb 2005 to 31 Mar 2020 [Section 43(3B) of the Income Tax Act]. Withholding tax does not apply to any distribution made by a REIT where tax has already been paid, on the income from which the distribution is made, by the trustee of the trust [Section 45G(4) of the Income Tax Act].
In Budget 2019, to continue to promote the listing of REITs in Singapore and strengthen Singapore’s position as a REITs hub in Asia, the Minister for Finance extended the reduced withholding tax rate of 10% on distributions made by a REIT to qualifying non-resident non-individual unit holders during the period from 1 Apr 2020 to 31 Dec 2025.
A qualifying non-resident non-individual unit holder is one who:
If tax has been deducted in error at the prevailing corporate tax rate from the distributions made to nominees whose beneficiaries are any of the persons listed below, the Comptroller will refund the tax over-deducted to the trustee of REIT directly on a quarterly basis. The beneficiaries^ may be any of the following:
^Do not include a person acting in the capacity of a trustee.
The trustee,in turn will refund the amount to the nominees who will then refund it to the beneficiaries. For this purpose, the trustee is required to send its request for refund with all the original subsidiary income tax certificates on a consolidated basis. Please send your request to:
Revenue & Payment Management Branch
Inland Revenue Authority of Singapore
55 Newton Road
5 Tax Refund under S46 of ITA for payments withheld at prevailing corporate tax rate.
Where an Avoidance of Double Taxation Agreement (DTA) is applicable, the rates specified in the DTA of the respective countries would apply. If you are applying the rates in the DTA, you would need a Certificate of Residence from the non-resident to prove that it is a tax resident of the treaty country. Please submit a Certificate of Residence from Non-Residents (Claim for relief from Singapore Income Tax under Avoidance of Double Taxation Agreement) that is duly certified by the tax authority of the country of residence, to IRAS.