Tax Treatment Of Dividends
Updated: Feb 8, 2022
Dividends are profits you receive from your share of ownership in a company, which may be paid to you in cash or in kind. For example, a company may pay dividends to you in the form of company's shares.
Foreign-sourced income that is remitted into Singapore in the form of dividend, branch profits and service income to Singapore tax residents are exempt from tax in Singapore, provided the income is from a foreign jurisdiction with a headline tax rate of at least 15% at the time the foreign income is received in Singapore, and the income has been subject to tax in the foreign jurisdiction.
Foreign income that has been exempt from tax in the foreign jurisdiction as a direct result of a tax incentive granted for substantive business operations carried out in that jurisdiction will be considered as having met the “subject to tax” test.
If an individual resident in Singapore receives foreign-sourced dividends through a partnership in Singapore, these dividends may be exempt from Singapore tax if certain conditions are met.
Singapore operates a one-tier corporate tax system, under which shareholders will not be taxed on dividends paid by a Singapore resident company.