Income tax in Singapore
|This article does not cite any references or sources. (December 2013)|
|An aspect of fiscal policy|
Individual income tax in Singapore forms part of two main sources of income tax in Singapore, the other being corporate taxes on companies. Payable on an annual basis, it is currently based on the progressive tax system (for local residents and tax residents), with taxes ranging from 0% to 20% since Year of Assessment 2007. The Year of Assessment (YA) is based on the calendar year commencing 1 January to 31 December, and is payable on a preceding year basis, whereby taxes payable per year of assessment is based on income earned in the preceding calendar year.
Taxation is based on the source principle, in which only income earned at source, in this case in Singapore, or those derived from overseas but received in Singapore, are taxable. Any income arising from sources outside Singapore and received in Singapore on or after 1 January 2004 by an individual (other than partners of a partnership) is exempt from tax. This system has the potential to allow for tax avoidance practices by individuals who derive income from abroad, gain tax exemptions via their non-resident status there, and use this income outside Singapore.