Under Singapore Tax law, a company or an individual (also known as the "payer") must withhold a percentage of the payment of specific nature to a non-resident company or a non-resident individual.
A non-resident company is a company where the management and the control are not exercised in Singapore, and the place of incorporation of the company is not indicative of the company's tax residence.
A non-resident individual includes non-resident professionals (consultants, trainers, coaches), non-resident public entertainers (artistes, musicians, sportsmen) and non-resident company directors.
The following are the type of payments:
The withholding tax rate depends on the nature of payments.
If the date of payment to a non-resident company or a non-resident individual is on or after 1 July 2012, the payer is required to file the relevant form to Inland Revenue Authority of Singapore ("IRAS").
If the company makes multiple payments to the same non-resident company or non-resident individual for the same engagement for a period of sixty (60) days, the company should consolidate these payments into a single filing and make payment to IRAS.
The company must pay the withholding tax amount withheld to IRAS before 15th of the 2nd month from the last date of payment, together with the relevant form.
With effect from 1 July 2016, electronic filing of withholding tax form is available via myTaxPortal.
The late penalty fee of 5% is imposed for payment not received by the due date, and an additional 1% penalty is imposed on the unpaid tax.
Should you have further queries or need some assistance in withholding tax matters, please send us a business enquiry to our Tax Service team.