- Withholding tax is the payer’s responsibility. If your Singapore company pays interest, royalties, service fees or directors’ fees to a non-resident, you must deduct the tax and remit it to IRAS, even if the recipient has no presence here.
- Rates depend on the payment: 15% on interest, 10% on IP royalties, the prevailing 17% corporate rate on services performed in Singapore, and 24% on non-resident individuals and directors. A tax treaty can lower these if you hold a valid Certificate of Residence.
- File and pay by the 15th of the second month after the payment date. Miss it, and IRAS adds a 5% penalty, rising by 1% a month up to 15% of the tax.
Getting withholding tax in Singapore right matters most when you are paying someone overseas. Pay interest to a foreign lender, a royalty to an IP owner, or a fee to a non-resident director, and the duty to deduct tax and hand it to IRAS sits with you, the payer.
Get it wrong and the cost lands on your company, not the recipient. Penalties and interest start the moment a deadline slips, and they apply no matter how small the payment was.
|
The short answer Withholding tax in Singapore applies when a company pays certain income to a non-resident, and the paying company, not the recipient, must deduct the tax and remit it to IRAS. The most common rates are 15% on interest, 10% on royalties for the use of intellectual property, the prevailing 17% corporate rate on services a non-resident company performs in Singapore, and 24% on payments to non-resident individuals and directors. You must file and pay by the 15th of the second month after the date of payment, and a valid tax treaty can reduce the rate. |
This guide breaks down:
- What WHT is
- When it applies
- The latest IRAS withholding tax rates
What is withholding tax in Singapore?
Withholding tax is a way of collecting tax at source. When your company makes certain payments to a non-resident, you withhold a percentage and pay it directly to IRAS, with the non-resident receiving the balance.
The legal basis is Section 45 of the Income Tax Act, and the obligation falls on you as the payer. It does not matter that the recipient is based abroad or has never set foot in Singapore.
Which payments to non-residents are subject to withholding tax?
Withholding only applies when the payee is a non-resident. A company is non-resident when its control and management sit outside Singapore, regardless of where it was incorporated, while an individual is non-resident when present here for fewer than 183 days in a calendar year. You can confirm the test in our guide to company tax residency.
The payments that most often trigger withholding tax for Singapore SMEs and foreign-owned companies are:
- Interest on loans from overseas shareholders, parent companies or lenders.
- Royalties and licence fees paid to a foreign intellectual property owner.
- Technical, management and other service fees, where relevant.
- Rent for the use of movable property.
- Fees to non-resident directors, professionals and public entertainers.
Pure dividends and payments for goods fall outside the net. As always, it is the substance of the payment that counts, not the label on the invoice.
Who is considered a non-resident for withholding tax Singapore?
WHT applies only when the payee is a non-resident. IRAS considers the following as non-residents:
1. Non-resident company
A company is non-resident if its control and management are not exercised in Singapore. Place of incorporation does not determine tax residency.
2. Non-resident individual
An individual present in Singapore for less than 183 days in a calendar year.
3. Non-resident professional
A self-employed individual exercising a profession in Singapore for under 183 days in a year.
4. Non-resident public entertainer
Performers in Singapore for less than 183 days, including:
- Musicians
- Athletes
- Television, stage, and radio artistes
5. Non-resident director
A board director physically in Singapore for less than 183 days annually.
What are the withholding tax rates in Singapore?
The rate depends on the type of payment and the status of the recipient. The table below sets out the standard domestic rates that apply where no tax treaty reduces them.
|
Payment to a non-resident |
Standard rate |
Note |
|---|---|---|
|
Interest, commissions and loan-related fees |
15% |
Final tax when the income is earned through operations outside Singapore |
|
Royalty for the use of movable property or IP |
10% |
Reducible under a tax treaty |
|
Services performed in Singapore (non-resident company) |
17% |
The prevailing corporate income tax rate |
|
Non-resident individual |
24% |
On gross, where operations are carried out in Singapore |
|
Non-resident director’s fees |
24% |
Date of payment is the date fees are approved at the general meeting |
|
Non-resident professional |
15% on gross |
Or resident rates on the net amount, if elected |
Two points are worth holding onto. Where services are performed in Singapore, a non-resident company is charged at the prevailing corporate tax rate of 17%, and you can sense-check the wider position with our corporate tax calculator. A non-resident public entertainer is generally taxed at a concessionary 15% on gross.
There is a timing change to note on royalties. The concession that taxes royalties paid to authors, composers and choreographers on the lower of net or 10% of gross still applies up to YA2026, but it is being withdrawn in stages: 40% of gross becomes taxable in YA2027, 70% in YA2028, and the full net amount from YA2029.
The clock starts at the earliest of the contract date, the invoice date, the actual payment date, or the date the amount is credited, not the day the money leaves your account. For directors’ fees, it is the date the fees are approved at the general meeting.
When and how do you file and pay withholding tax?
The deadline is firm: you must file and pay by the 15th of the second month after the date of payment. Pay a foreign consultant on 10 April, for example, and your withholding tax is due by 15 June.
Filing is done electronically through the IRAS myTax Portal. A short checklist keeps each payment clean:
- Confirm the payee is a non-resident and identify the payment type and correct rate.
- Check whether a tax treaty applies and secure a valid Certificate of Residence before you pay.
- Decide who bears the tax. If your contract says you do, gross up the payment correctly rather than paying first and remitting later.
- File the Form S45 return on myTax Portal using Corppass and pay the amount due.
Withholding tax sits alongside your other IRAS obligations, so it helps to map it against the same calendar you use for ECI filing and your annual corporate tax return.
How do double tax agreements reduce the withholding tax rate?
Singapore has more than 90 tax treaties, and many cut the standard rate on interest, royalties and service fees. The reductions can be significant for a company that makes regular cross-border payments.
To claim a treaty rate, especially with double tax agreements, the non-resident recipient must give you a valid Certificate of Residence from their home tax authority, and you need it before you pay or by the filing deadline. Without it, you withhold at the full domestic rate and apply for a refund later.
Withholding tax Singapore calculations: Important points
- If income is earned outside Singapore, WHT is applied on gross income and is considered final.
- If services are performed in Singapore:
- Non-resident companies → CIT rate
- Non-resident individuals → 24%
Changes to royalty tax concession
As announced in Budget 2024:
- Up to YA 2026 → tax on 10% of gross royalties or net amount, whichever is lower
- YA 2027 → 40% of gross royalties taxable
- YA 2028 → 70%
- YA 2029 onwards → 100% of gross royalties (net amount taxable)
What withholding tax mistakes do SMEs make?
Most withholding tax problems are not exotic. They cluster around a handful of avoidable errors:
- Missing software and SaaS royalties. A payment for the right to commercially exploit software or IP is a royalty and is taxable, even when it looks like a simple subscription.
- Assuming intra-group payments are exempt. Management fees, service fees, royalties and interest paid to an overseas parent or related company are treated the same as third-party payments.
- Forgetting directors’ fees. Fees to a non-resident director attract withholding tax at 24%, dated from when they are approved.
- Grossing up incorrectly. If you bear the tax under the contract, you must gross up at source rather than pay the recipient in full and remit separately.
- Claiming a treaty rate without the paperwork. No valid Certificate of Residence means no reduced rate, and the shortfall falls on you.
How Sleek helps you handle withholding tax
Withholding tax is easy to get wrong and expensive to fix after the fact. Sleek’s accounting services confirm whether a payment is caught, apply the right rate, check treaty relief and your Certificate of Residence, and file your Form S45 on time so a deadline never turns into a penalty.
Plans start from S$75 a month, covering your tax compliance from one place rather than payment by payment.
450,000
businesses worldwide.
from 4,100+ reviews.
FAQs about withholding tax in Singapore
Who is responsible for withholding tax in Singapore?
The Singapore payer is responsible, not the non-resident recipient, and the duty applies to any person or business making a specified payment, even if the recipient has no presence in Singapore. The payer deducts the tax, remits it to IRAS, and files the return.
When is withholding tax due?
It must be filed and paid by the 15th of the second month after the date of payment. The date of payment is the earliest of the contract date, the invoice date, the actual payment date, or the date the amount is credited to the recipient.
Can a tax treaty reduce withholding tax?
Yes. One of Singapore’s 90-plus double tax agreements can lower or remove the rate on interest, royalties or services, but you generally need a valid Certificate of Residence from the recipient’s home tax authority before you pay or by the filing deadline.
What happens if I file or pay withholding tax late?
IRAS imposes a 5% penalty on the unpaid tax, and if it remains unpaid more than 30 days after the due date, a further 1% is added for each completed month, up to a maximum of 15%. IRAS can also appoint your bank as a recovery agent for the outstanding amount.
Is the royalty concession still available in 2026?
For now, yes. Royalties paid to authors, composers and choreographers are still taxed on the lower of net royalties or 10% of gross up to YA2026, but the concession is being phased out, with 40% of gross taxable in YA2027, 70% in YA2028, and the full net amount from YA2029.
