Social security contributions
Central Provident Fund (CPF)
The CPF is Singapore's national pension scheme. Contributions are payable by Singapore citizens and permanent residents only. Employers and employees contribute 17% and 20%, respectively, of ordinary monthly wages, up to an income ceiling of SGD 6,000. Their respective maximum contributions are therefore SGD 1,020 and SGD 1,200. The rates are applicable to employees aged 55 years and below.
These rates also apply to additional wages (e.g. year-end bonus), up to a maximum contribution of:
- the actual additional wages if the annual ordinary wages are not more than the ordinary wage ceiling of SGD 72,000 and the total wages are not more than the maximum contribution of SGD 102,000
- the difference between the maximum contribution of SGD 102,000 and annual ordinary wages if the total wages exceed the maximum contribution of SGD 102,000 but the annual ordinary wages are not more than the ordinary wage ceiling of SGD 72,000, or
- the lower of the difference between the maximum contribution and the ordinary wage ceiling (SGD 102,000 - SGD 72,000) or the actual additional wages if annual ordinary wages exceed the ordinary wage ceiling of SGD 72,000.
Reduced rates apply for employees who are earning less than SGD 750 per month, as well as for those above 55 years of age, although these rates are being gradually increased.
Foreign nationals and their employers are precluded from making CPF contributions. Foreign employees who become Singapore permanent residents, and their employers, may contribute at reduced rates for the first two years.
Supplementary Retirement Scheme (SRS)
The SRS is a voluntary scheme to encourage employees and the self-employed to save for retirement over and above their CPF savings. The maximum amount to be contributed is subject to an income cap of SGD 102,000. Employers are allowed to contribute to their employees’ SRS accounts, subject to the contribution limits below. Employees will be taxable on these employer contributions, but will be allowed corresponding tax relief.
The contribution rate caps for contributions made to the SRS scheme are as follows.
|Residency status||Rate cap (%)|
|Singapore citizens or permanent residents||15|
Capital gains taxes
There is no capital gains tax in Singapore. Where an individual enters into a series of capital transactions, however, the tax authorities may take the view that the individual is carrying on a business and assess that person to income tax accordingly.
Goods and services tax (GST)
GST is charged at 7% on the supply of goods and services made in Singapore by a taxable person in the course or furtherance of one's business and the importation of goods into Singapore. It was announced in the 2018 Budget that this rate would be increased to 9% sometime between 2021 and 2025. In the 2021 Budget, the specific date for the GST rate increase was not announced though the Minister for Finance has emphasised that the GST rate increase should take place sooner than later within the timeframe of 2022 to 2025.
The only exemptions from GST are prescribed financial services (including life insurance), the sale or rental of residential properties, the sale of digital payment tokens and the import and local supply of investment precious metals (IPM). Zero-rating only applies to the export of goods and international services.
For the GST levied on import of goods, there are reliefs available to ease the cash-flow burden of import-export traders by suspending GST at the time of importation. Low-value goods imported via air or post that are valued up to and including SGD 400 also enjoy GST import relief (subject to conditions and exceptions).
GST is generally not charged on import of services. However, this changed from 1 January 2020 with the introduction of a reverse charge on local businesses that are subject to input tax restriction due to the making of certain exempt supplies or carrying on of non-business activities. If these businesses are registered for GST, they are required to account for GST on the in-scope services they import. If these businesses are not registered for GST, they would be liable for GST registration under the reverse charge rules if it imports in-scope services exceeding SGD 1 million in a year. These businesses may, in turn, claim the GST accounted for as their input tax, subject to the normal rules for input tax recovery.
In addition to the new rules introduced from 1 January 2020, overseas suppliers and electronic marketplace operators that supply digital services to local non-GST registered consumers in excess of the prescribed thresholds are required to register for GST in Singapore under the “overseas vendor GST registration” (OVR) regime.
A taxable person is one who is, or is required to be, registered for GST. GST registration is required if one's taxable turnover exceeds SGD 1 million per year. Voluntary registration is permitted if the taxable turnover is below the registration threshold, subject to conditions.
A supply of goods is made in Singapore if the goods are in Singapore at the time of supply, and a supply of services is made in Singapore if the supplier belongs in Singapore. Generally, a person belongs in Singapore if one's business establishment (including carrying on a business through a branch or agency) or fixed establishment that is most directly concerned with the supply of service is in Singapore.
A taxable person is allowed to credit the input GST paid on taxable purchases against the output GST chargeable on taxable supplies made. However, input GST claim is disallowed on certain purchases. These include supplies of goods and services such as non-business expenses, club subscription fees, family benefits, motor car expenses, medical expenses, medical and accident insurance premiums and transactions involving betting, sweepstakes, lotteries, fruit machines, or games of chance.
A non-resident is not entitled to GST input tax claims unless it is registered for GST in Singapore. The non-resident business will need to appoint a Singapore agent to act on its behalf if it applies for GST registration in Singapore. These rules do not apply to businesses that are registered under the OVR regime.
Net wealth/worth taxes
There are no net wealth or net worth taxes in Singapore.
Inheritance, estate, and gift taxes
Estate duty has been abolished for deaths occurring on or after 15 February 2008.
Property tax is levied annually at the following rates on the annual value of houses, land, buildings, or tenements:
|Non-owner occupied residential property (excluding residential land)||Graduated rates from 10% to 20%|
|Owner-occupied residential property (excluding residential land)||Graduated rates from 0% to 16%|
|Land and non-residential properties||10%|
Excise duties are imposed on intoxicating liquors, tobacco products, motor vehicles, and petroleum products. Duties are also imposed on gambling and other games of chance.
Other non-income taxes
Stamp duties are typically payable by the buyer (i.e. buyer’s stamp duty or BSD); however, seller's stamp duty (SSD) and additional buyer's stamp duty (ABSD) have been introduced as measures to cool the residential property market.
For conveyance of immovable property, there is BSD of up to 4% on the purchase price or market value, whichever is higher. There is an ABSD of up to 20% and an SSD of up to 12% on the price or market value of the property, whichever is higher, depending on the type of property (residential or industrial), the residency status of the buyer, the holding period of the property, and the number of properties owned.
Foreigners of certain nationalities who fall within the scope of the respective free trade agreements will be accorded the same treatment as Singaporeans.
Certain transfers of equity interest in property holding entities (PHEs) whose primary tangible assets (owned directly or indirectly) comprise Singapore residential properties could attract additional conveyance duty (ACD) for buyers and sellers who are significant owners (as defined) of PHEs, as well as for a buyer who would become a significant owner after acquiring an equity interest in the PHEs.
Leases attract duty at 0.4% of the total rent (for leases of up to four years) or 0.4% of four times the average annual rent for the period of the lease (for leases longer than four years), but leases with average annual rents not exceeding SGD 1,000 are exempt from stamp duty.
Stocks and shares
Agreements for sale of or instruments effecting the transfer of stocks and shares are subject to stamp duty of 0.2% on the purchase price or market value of the shares transferred, whichever is higher.
Local non-income taxes
Foreign Worker Levy (FWL)
The FWL is a monthly levy that employers are liable to pay for each foreign employee (Work Permit or S Pass holders) hired. The levy rate depends on the employer’s industry and the ratio of foreigners to Singaporeans and permanent residents employed in the company.
Skills Development Levy (SDL)
Employers are required to contribute a monthly levy of 0.25% on the first SGD 4,500 of the gross remuneration of all employees, subject to a minimum of SGD 2, whichever is higher.
The SDL is channelled to the Skills Development Fund (SDF), which is used to support workforce upgrading programmes and to provide training grants to employees sent for training under the National Continuing Education Training system.
The SDL and SDF are administered by the Skills Future Singapore Agency with the CPF Board as the collecting agent.