On or about 28 Feb 2022, the Inland Revenue Authority of Singapore (IRAS) has updates its website contents to information on taxable and non-taxable income.
Generally, income accrued in or derived from Singapore or received from outside Singapore is taxable.
Income Received in Singapore from Outside Singapore
Under Section 10(25) of the Income Tax Act 1947, income from outside Singapore is considered received in Singapore when it is:
- Remitted to, transmitted or brought into Singapore;
- Used to satisfy any debt incurred in respect of a trade or business carried on in Singapore; or
- Used to purchase any movable property (such as equipment, raw material, etc.) brought into Singapore.
Section 10(25) is applied to tax foreign income received in Singapore only if the income belongs to an individual* who is resident in Singapore or an entity that is located in Singapore.
Non-resident individuals and foreign businesses that are not operating in or from Singapore can remit their foreign income to Singapore without being taxed on the income.
As an administrative concession, foreign income that is reinvested overseas without being repatriated to Singapore is not considered received in Singapore at the point of reinvestment. This means that the taxation of the foreign income is deferred until the investment is sold and the proceeds are brought into Singapore.
If the foreign-sourced income is subject to tax in Singapore and overseas, tax reliefs may be available to alleviate the double taxation suffered.
Non-taxable Income
Capital gains are not taxable. These include gains on sale of fixed assets and gains on foreign exchange on capital transactions.
Certain income are specifically exempted from tax under the Income Tax Act 1947, subject to conditions. These include:
- Certain shipping income derived by a shipping company under Section 13A and Section 13E
- Foreign-sourced dividends, branch profits and service income received by a resident company under Section 13(8)
- Gains derived by a company on the disposal of equity investments under Section 13W (PDF, 346KB)