Withholding Tax in Singapore: A Quick-Reference Guide
If your company pays a non-resident for interest, royalties, technical services, management fees, or director's fees, you may need to withhold a portion of that payment and remit it directly to IRAS under the Income Tax Act 1947.
This obligation sits with you as the payer, not the recipient. Getting it wrong by paying the full amount to the non-resident without withholding does not eliminate the liability: IRAS will look to the payer to make good any shortfall.
Payments That Trigger Withholding Tax
Withholding tax applies when a Singapore company or individual makes the following types of payments to a non-resident:
- Interest, commissions, or fees connected to a loan or indebtedness
- Royalties for the use of intellectual property, know-how, or copyright
- Payments for technical assistance, management fees, or services performed in Singapore by a non-resident
- Rent for movable property
- Director's fees and other remuneration paid to non-resident directors
Key Withholding Tax Rates
| Payment Type | Rate |
|---|---|
| Interest | 15% |
| Royalties (IP-related) | 10%, or reduced treaty rate |
| Services performed in Singapore by a non-resident company | Prevailing corporate income tax rate (currently 17%), applied to the portion of fees attributable to work done in Singapore |
| Non-resident director's remuneration | 24%, applies regardless of days spent in Singapore |
Non-resident directors: The 24% rate applies to director's fees and board remuneration regardless of how many days the director spends in Singapore. This rate does not qualify for the reduced 15% non-resident employment rate that may apply to ordinary employees.
Treaty Relief
Singapore has an extensive network of Double Taxation Agreements (DTAs) that can reduce withholding tax rates below the standard statutory rates. However, treaty relief is not automatic.
To apply a reduced DTA rate, the payer must hold a valid Certificate of Residence (COR) issued by the tax authority of the recipient's home country, covering the year in which the payment is made.
Without a valid COR: IRAS will deny treaty relief on audit and recover the shortfall from the payer, together with penalties and interest. Always obtain the COR before applying a reduced rate.
Filing and Payment Deadline
Withholding tax must be filed via Form S45 on IRAS's myTax Portal and paid by the 15th of the second month following the date of payment to the non-resident.
Example
A payment made to a non-resident on 10 March must be filed and remitted to IRAS by 15 May.
Penalties for Late Payment
- 5% late-payment penalty on the outstanding withholding tax
- A further 1% per month for continued non-payment
Need help with withholding tax obligations?
Adpeco Integrated Services helps companies identify withholding tax obligations, obtain Certificates of Residence, and file S45 returns on time. Contact us to review your cross-border payment arrangements.