Event

Withholding Tax in International Business

  • October 4, 2019

If you plan to do international business, you need to understand the withholding tax

**The tax rate of withholding tax enjoyed by different countries and countries is also different.

Singapore withholding tax is a tax imposed on non-Singapore residents, including employees, business partners and overseas agents.

Withholding Tax RatesA person must withhold tax when certain types of payments (e.g. interest, royalty, services etc.) are made to non-resident persons. The rate of withholding tax depends on the nature of payment.

  1. Dividend

Dividends paid by Singapore resident companies are not subject to withholding tax.

  1. Interest

In the event that the tax treaty preferential tax rate cannot be applied, the interest paid to non-residents is subject to a withholding tax at a rate of 15%. Certain special interest rates are eligible for tax exemption or for lower tax rates. The 15% tax rate is the final tax rate and applies only to interest earned by non-residents that is not related to operations in Singapore or to permanent establishments in Singapore. Other interest rates that do not apply to low tax rates will be taxed at the current corporate tax rate.

  1. Royalties

In the case where the tax treaty preferential tax rate cannot be applied, the royalties paid to non-residents are subject to a withholding tax at a rate of 10%. There are tax exemptions for some royalties. The 10% tax rate is the final tax rate and applies only to royalties obtained by non-residents that are not related to operations in Singapore or to permanent establishments in Singapore. Other royalties that do not apply to low tax rates will be taxed at the current corporate tax rate.

  1. Fees for technical services

The application or use of scientific and technical, industrial or commercial knowledge or information, or the management or assistance of any trade operation or professional activity, and the payment to non-resident companies (non-personal) should generally be subject to a withholding tax at a rate of 17%, unless Tax treaties or certain exceptions apply.

Collection categoryTax rate
Interest, fees and payments related to any loan or debt15%
Royalties or other payments for movable property10% (final tax)
Payment for the use or right to use scientific, technical, industrial or commercial knowledge or information10% (final tax)
Technical assistance service fee and management feeThe corporate tax rate is 17%

(Personal tax rate is 22%)

Rent or other payment for the use of movable property15% (final tax)
Scheduled charter fee and voyage charter fee, bareboat charter fee0-3%
Director’s remuneration / director’s fee22%

Non-resident real estate traders’ income from the sale of real estate

 

15%