Withholding Tax in Singapore: A Detailed Guide 2025

If your Singapore business makes payments to non-resident individuals or entities for services provided in Singapore, you may be required to withhold withholding tax. This is an important requirement to ensure tax compliance with the Inland Revenue Authority of Singapore (IRAS).

1. So who is subject to contractor tax in Singapore? What is the specific tax rate?
2. How to declare and pay taxes on time? 

This article will provide detailed guidance on WHT tax, helping businesses understand their tax responsibilities and avoid unnecessary mistakes.

1. What is the property tax in Singapore?

Withholding Tax (“WHT”) in Singapore is a tax levied on income received by a non-resident individual or business when providing services or conducting business transactions in Singapore. The payer is responsible for deducting a portion of the income and paying it to the Inland Revenue Authority of Singapore (IRAS).

2. Subjects subject to contractor tax in Singapore

Individuals and entities that are not resident in Singapore but derive income from business transactions here may be subject to withholding tax. These include:

• Non-resident company: Not managed and operated in Singapore.
• Non-resident individual: Present in Singapore for less than 183 days in the tax year.
• Non-resident Professional: Working independently in Singapore for less than 183 days/year.
• Non-resident performing artistes: Singers, musicians, actors, athletes performing in Singapore for less than 183 days/year.
• Non-resident Director: A board member who is present in Singapore for less than 183 days/year.

3. Contractor tax rate in Singapore

Contractor tax is applied at the following rates:

• 15% of total income for non-resident professionals.
• 24% on net income if the expert chooses the net income tax method (effective from 1/1/2023, previously 22%).

Specifically: 

• Payment to non-resident directors: 24% (22% from 01 January 01 to 2016 December 31).
• Payments to non-resident professionals/companies (unincorporated businesses): 15% of gross income or the applicable non-resident individual rate on net income.
• Payment to non-resident public entertainers: 15% of gross income.
• Commission/payment for non-resident international market agents: 3%.

Note: 

• If the services are performed entirely outside Singapore, the income is not subject to withholding tax, even if the Singapore business makes the payment.
• Any individual or entity in Singapore making taxable income payments to non-resident individuals or businesses must withhold tax and remit it to IRAS.
• If Singapore has Double Taxation Agreement (DTA) With the recipient country, the tax rate may be reduced or adjusted lower according to the provisions of the agreement.

4. Payments subject to contractor tax

Some common types of income subject to contractor tax in Singapore:

• Interest, commissions and fees associated with the loan.
• Royalties and property rights.
• Technical service fee, management support.
• Mobile property rental.
• Payment when purchasing real estate from foreign investors.
• Distribution of profits from real estate investment trusts (REITs).

5. How to declare and pay contractor tax

• Tax payment deadline: The payer must declare and pay contractor tax before the 15th day of the second month from the payment date.
• Form: Submit information via IRAS form IR37.
• Handling of violations: Late or non-payment may result in fines or collection.

6. Important notes on contractor tax in Singapore

• If a business fails to comply with tax deduction and payment regulations, it may be subject to penalties.
• When the contract includes payments for software support, training, and maintenance services in Singapore, the scope of services must be clearly defined to apply appropriate tax.
• Some payments such as personal software usage fees or expenses related to activities outside Singapore may not be taxable.

Singapore's contractor tax has a significant impact on foreign businesses and individuals doing business in Singapore. Understanding this tax helps businesses comply with regulations, optimize costs and avoid legal risks. If you need tax assistance or business advice in Singapore, contact a tax expert for more detailed guidance.

7. How does GLA support businesses in declaring contractor tax in Singapore? 

GLA provides comprehensive consulting and support services in filing withholding tax (WHT) in Singapore, helping businesses comply with IRAS regulations and optimize tax accounting processes.

• Determine tax liability: Assess whether payments are subject to contractor tax and apply the correct tax rate.
• Tax advice: Check whether your business can benefit from double taxation agreements (DTAs) to reduce your tax liability.
• Prepare and submit WHT declaration: Support businesses to prepare and submit contractor tax declaration on time and in accordance with regulations.
• Business representative submits declaration to the Internal Revenue Service of Singapore (IRAS).
• Resolve issues with IRAS: Support businesses in case of errors or disputes with tax authorities, ensuring compliance while optimizing tax obligations.

With experience supporting many international businesses, GLA helps you handle contractor tax quickly, accurately and effectively. Contact GLA now for detailed advice!

8. Frequently asked questions about contractor tax in Singapore

Highlights

• Withholding Tax applies to payments from a Singapore business to a non-resident individual or company providing services in Singapore.
• WHT rates vary by category: Non-resident directors (24%), non-resident professionals/companies (15%), public entertainers (15%), international market agents (3%).
• WHT payment deadline: Enterprises must deduct and pay tax within 15 days from the date of payment.