20 Aug 2009

Singapore sourced Income

by Darren

In Singapore taxation is on a territorial basis. This means that gains or profits that are accrued in or derived from Singapore are subject to tax. In general income not sourced in Singapore by a non-resident is not subject to Singaporean tax. To determine whether the income is sourced in Singapore we ask 2 questions: What is the originating cause of the income? Is the originating cause in the taxing jurisdiction? For example lets look at sales of a company. Lets assume a US company based in Delaware made a sale to a Singaporean company. The originating cause of the income was a sale within Singapore. The taxing jurisdiction will be Singapore and not the USA because the income was derived in Singapore The Singapore Tax legislation has a number of provisions that deem certain income to be sourced in Singapore:
  • Trading operations carried on partly in Singapore
  • Employment exercised in Singapore
  • Interest, commission or fee, etc paid to a non-resident in connection with any loan or indebtedness
  • Royalty, payment for use or right to use moveable property
  • Payment for know-how and technical assistance
  • Fees for management or assistance in the management of any trade, business or profession
  • Rent for use of a movable property

Next entry: Double Tax Treaties
Previous entry: Australian sourced Income


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