Non-resident firms are defined as follows for Singapore tax purposes:
Interest, commissions, and any other expenses associated with debt or loans: Singapore withholding tax is levied on interest on past-due trade accounts, interest on credit terms granted to a non-resident supplier, and commission or loan fees paid to a non-resident.
Royalty, usage rights, and intellectual property: Royalties are subject to withholding tax (WHT) in Singapore, which is either 10% or the current corporate rate. It is also levied on payments involving the use of commercial, scientific, technical, or industrial information for business purposes, as well as the engagement of non-resident professionals to perform these services on your behalf.
Management costs (prevailing corporate tax rate): Payments owing to foreign organizations who provide management services or assist you in managing your business may be subject to Singapore WHT. These fees are subject to specific criteria, such as double taxation treaties and whether or not your firm is permanently established in Singapore.
Provided services (prevailing corporate tax rate): When you employ a non-resident company to install equipment, give technical assistance, provide training and advisory services, or perform other similar services in Singapore, you must pay Singapore WHT. It is important to note that remotely offered services are not subject to WHT.
Rent: Rent or payments made to a non-resident corporation for movable property will be subject to WHT in Singapore.
A non-resident professional (NRP) is someone who has spent less than 183 days per year in Singapore while delivering services there. Non-resident professionals are subject to Singapore withholding tax on any sort of revenue earned in Singapore for services rendered.
The following are examples of NRPs:
If the NRP is advised that his or her services will be withheld tax-free, the income they receive is regarded as a net payment. The Singapore payer is still required to pay WHT and must calculate the amount to be paid to IRAS in addition to the amount paid to the NRP.
Except in the following instances, the usual withholding tax rate for NRPs is a flat 15% of gross income:
If you fail to pay your Singapore withholding tax on time, IRAS will send you a Demand Note that includes the late payment penalty (currently 5 percent).
If you do not pay the tax and penalty by the due date specified in the Demand Note, you will incur an extra penalty of 1% for each month you are late (subject to a maximum of 15 percent).
Singapore has double tax treaties (DTAs) with numerous nations to avoid corporations and individuals from being taxed twice.
If your firm works in a country with which Singapore has a tax treaty, the DTA may provide relief from double taxation. Please keep in mind that this is dependent on the precise service your firm provides, as well as the unique provisions of the DTA in your nation.
