Singapore Corporate Tax Service
Hotline: 86-755-82143422 Email: 2355725105@qq.com
Singapore withholding tax for non-resident company applies to the company which is either incorporated in a foreign country or a Singapore-incorporated company but is treated as non-resident for tax purpose.
A Singapore-registered company is considered tax resident in Singapore if the control and management of its business activities is conducted inside Singapore. If the company is managed outside Singapore, it is deemed to be non-resident. An example offered by IRAS is that of a Singapore branch of a foreign company, which is treated as non-resident because the business is essentially managed by the overseas-based parent company.
Only certain types of payments attract withholding tax for non-resident companies. Specifically:
Interest, commission, fee in connection with any loan or indebtedness – If your company is charged interest on overdue trade accounts and interest on credit terms paid to a non-resident supplier, then withholding tax applies. Payment of withholding tax is also required for any fees as a result of a commission or loan that is paid to a non-resident. When determining withholding tax under these instances, it is only relevant for transactions where the business is deemed to have taken place in Singapore. Withholding tax rate for this type of payment is 15%.
Royalty or other payments for the use of or the right to use any movable property – Any royalties due to a non-resident company is subject to withholding tax, either a certain percentage or at the prevailing corporate rates. It is also due on payments for exploiting commercial, scientific, technical or industrial knowledge for business activities or hiring a foreign expert to render these skills on your behalf. Withholding tax rate for this type of payment is 10%.
Management fees – Under certain conditions, taking into account factors such as Double Taxation Agreements and whether or not a company is permanently established in Singapore, withholding tax may apply for payment due to foreign entities that provide management services or help you manage your business. Withholding tax rate for this type of payment is as per the prevailing corporate tax rate.
Services rendered – If you hire a non-resident company to provide services, such as installing equipment, technical support, training, consultancy and other work that takes place in Singapore, then withholding tax will be charged. This also applies to any monthly allowances paid to employees of the non-resident company. Again, the payment of withholding tax is only for work done in Singapore. If services are provided remotely, such as via the Internet, then you do not have to withhold payment for tax purposes as it is considered outside Singapore. Withholding tax rate for this type of payment is as per the prevailing corporate tax rate.
Rent – The rent paid to a non-resident company that leases movable property in Singapore is subject to withholding tax. Withholding tax rate for this type of payment is 15%.
For tax based on prevailing corporate rates, non-resident companies are able to claim a refund for any expenses incurred by providing certified accounts to the IRAS for consideration.
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