Overview of Withholding Tax (WHT)
Who must withhold and pay WHT
A person (known as the payer) who makes certain types of payments (e.g. royalty, interest, technical service fee, etc.) to a non-resident company or individual (known as the payee) must withhold a percentage of the payment and pay the amount withheld to IRAS as WHT.
A company is a non-resident when the control and management of the company is not exercised in Singapore. Do note that the place of incorporation of a company is not necessarily indicative of the tax residence of a company.
Filing and paying WHT
WHT rates vary according to the nature of payment.
As a payer, you must file and pay the WHT to IRAS by the 15th of the second month from the date of payment to the non-resident.
Types of Payment and Withholding Tax (WHT) Rates
A person must withhold tax when a payment of a specified nature has been made to non-resident companies. The rate of withholding tax depends on the nature of the payment.
Nature of income Tax rate
Technical assistance and service fees Prevailing Corporate Income Tax rate
Management fees Prevailing Corporate Income Tax rate
Types of Payment that are Subject to Withholding Tax
The following types of payment are subject to withholding tax when paid to non-resident companies:
Interest, commissions or fees in connection with any loan or indebtedness
Royalties or other payments for the use of or the right to use any movable property
Payments for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information
Payments of management fees
Rent or other payments for the use of any movable property
Payments for the purchase of real property from a non-resident property trader
Payments made from structured products (other than payments which qualify for tax exemption under Section 13(1)(zj) of the Income Tax Act)
Distributions from a real estate investment trust (REIT)
Payments for Technical Services Under Section 12(7)(b) & Management Services Under Section 12(7)(c) of the Income Tax Act
Payments for Services Rendered
The following rules apply to payments for services rendered:
Where payment is made to a non-resident company for the installation of equipment, technical support services, training, consultancy or other services provided by the non-resident company, withholding tax is applicable on the service fees attributable to the work done in Singapore.
If the payer pays for the monthly allowances of the non-resident company's employees who are sent to Singapore to perform the services, withholding tax is applicable on the allowances as the monthly allowances are considered additional service fees paid to the non-resident company.
However, if the non-resident company provides the services via electronic means from overseas (e.g. internet presentation, email and telephone) without sending staff to Singapore, the services are rendered outside Singapore and withholding tax is not applicable.