KNOWLEDGE BASE Taxation Triggers For Singapore

 

Business Taxation Triggers In Singapore

 

When doing business in Singapore, you need to consider whether your activities will trigger tax obligations even if you are not a Singaporean registered business and have no physical presence in Singapore. There are several ways in which you could trigger tax obligations by doing business in Singapore or with Singaporean residents.

 

Goods and Services Tax

The goods and services tax (GST) applies to GST-registered businesses that supply goods or services to customers. You are required to register for GST if your taxable turnover, or your anticipated taxable turnover, is over S$1 million over a twelve month period.

GST also applies to all goods imported into Singapore (imported for domestic consumption, sale, re-export, etc.) regardless of whether you are GST-registered or not. GST is collected on imported goods by Singapore Customs at the point of importation. For more detailed information on GST, see Goods and Services Tax in the Product Localization section.

 

Non-resident Employees on Business Trip to Singapore

As a general rule, all non-resident employees are subject to tax on employment income attributable to business trips in Singapore. An exemption to this tax obligation is available if the business trip(s) do not exceed 60 days. The 60-day exemption does not apply to company directors.

Taxable non-resident employee income generally includes any remuneration, including salary, benefits, and per diem attributable to the business trip. As of January 1, 2016, the Inland Revenue Authority of Singapore (IRAS) allows an acceptable rate for per diem allowances without triggering tax obligations, which applies to all employees, including directors. Any per diem allowances in excess of the acceptable rate are taxable.

You (employers) are responsible for obtaining tax clearance for their non-resident employees on business trips to Singapore if the employee does not qualify for the 60-day exemption. Even though tax clearance is not required for employees who qualify for the 60-day exemption, you (the employer) are still required to issue a Form IR8A (Return of Employee's Remuneration) to report the remuneration of these employees. Singapore resident companies are required to withhold tax for remuneration payments to non-resident directors.

 

Inland Revenue Authority of Singapore

Goods and Services Tax

per diem allowances

KNOWLEDGE BASE Taxation Triggers For Singapore