Singapore Tax FAQs & Expert Guidance (YA 2025/2026)

Expats holding an Employment Pass (EP) or S Pass are taxed based on their physical presence in Singapore during the calendar year. If an expat resides or works in Singapore for 183 days or more in a calendar year, they are classified as a tax resident for that Year of Assessment. As a tax resident, they benefit from progressive tax rates starting at 0% (first S$20,000 is tax-free) up to 24%, and can claim eligible personal reliefs. If an expat works in Singapore for between 61 and 182 days, they are treated as a non-resident and taxed at a flat 15% or the progressive resident rate, whichever yields the higher tax amount (with no personal reliefs). If physical presence is 60 days or less, employment income is completely exempt under the short-term employment rule.

Under Section 68(7) of the Singapore Income Tax Act, when a non-Singapore citizen employee ceases employment, plans to leave Singapore for more than three months, or transfers to an overseas post, the employer is legally obligated to notify IRAS and file Form IR21 at least one month before cessation. The employer must withhold all monies due to the employee (including salary, bonuses, and severance) until IRAS issues a Tax Clearance Directive (typically within 7–21 days). Once IRAS calculates and deducts any outstanding income tax, the employer releases the remaining balance.

Singapore's headline corporate tax rate is a flat 17% under a single-tier territorial framework. Distributed dividends are completely tax-exempt in the hands of shareholders. To foster entrepreneurship, the Start-Up Tax Exemption (SUTE) scheme grants qualifying new companies (for their first three consecutive YAs): a 75% tax exemption on the first S$100,000 of normal chargeable income (effective tax rate 4.25%), and a 50% exemption on the next S$100,000 (effective tax rate 8.5%). For non-qualifying companies, the Partial Tax Exemption (PTE) grants 75% relief on the first S$10,000 and 50% on the next S$190,000.

The Singapore Goods and Services Tax (GST) rate is 9%. Registration is mandatory for any business whose taxable turnover exceeds S$1,000,000 at the end of any calendar year, or if turnover is reasonably expected to exceed S$1,000,000 in the next 12 months. Businesses with turnover below S$1M can register voluntarily. GST-registered businesses collect 9% output tax and offset input tax paid on legitimate business purchases via quarterly GST returns filed on myTax Portal.