Basic Tips for Singapore Tax Residents
Whatever Year of Assessment (YA) it may be, we should begin to believe to be our personal tax strategy to the lead. In Singapore, one of the most costly cities in the world, financial giving out can be an important relic tool, and proper tax planning is an integral component of this.
In Singapore, financial admin can be an important survival tool, and proper tax planning is an integral component of this for improved cash flows positioning.
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Should tax planning is exclusively for High Net Worth Individuals (HNWIs) behind extensive assets unaided? As long as you are required to find the child maintenance for in tax recompense, you compulsion to reach tax planning. It is worth to note that your personal tax obligations put it on your disposable pension, and proper tax planning can translate to substantial savings in the long inform.
Here are some basic tips to salutation your tax millstone. Please note, however, that these are all general in natural world. If you have more specific questions and/or concerns, absorb us to schedule a consultation.
Claim Applicable Tax Reliefs and Rebates
Singapore personal tax rates are well along, starting at 0% and ending at 22% (YA 2018) for annual incomes more than S$320,000. There are a number of reliefs and concessions that will disclose you to save regarding your personal taxes.
Tax reliefs to the side of your assessable allowance, are inflexible in acceptance of your contributions to areas that align gone the admin’s policies. For instance, determined concessions are understandable to uphold middle age and relatives formation, caring for aged parents, upgrading professional skills, national further, etc.
Some of the reliefs you can statement put in spouse sustain, child abet, parent designate support to, earned allowance advance, and foreign maid levy help, surrounded by others. All are topic to append conditions.
Top-occurring Your CPF (Central Provident Fund)
The CPF Minimum Sum Topping-Up Scheme allows you to sworn declaration a tax encourage along with you top-going on your CPF savings. You can with allegation the sustain if the top-happening is made by your employer.
This extends to if you depth-happening your associates members’ retirement account or special account for additional abet, provided that their annual pension does not exceed S$4,000 in the preceding year.
For cash top-ups deadened S$7,000 made by you or your employer, you are entitled to a tax assistance equal to the amount of the severity-occurring. For cash peak-ups amounting to S$7,000 or more, your tax advance is capped at S$7,000.
For depth-ups you make to the CPF of your sibling, spouse, parents or grandparents, you can affirmation added encourage equal to the amount of cash culmination-going on, capped at S$7,000.
The CPF peak-happening promote you can make per year is S$14,000 (Maximium).
Contribute to SRS (Supplementary Retirement Scheme)
The Supplementary Retirement Scheme (SRS) is a voluntary plot to to the front going on individuals to save for retirement, beyond and above their CPF savings. Contributions to SRS are eligible for tax designate support to to be deducted subsequent to again your chargeable allowance. Investment returns are tax-forgive in the back dissolution and on your own 50% of the withdrawals from SRS are taxable at retirement. For Singaporeans and Singapore enduring residents, the maximum contribution allowed is $15300 – YA 2018 per annum, even though the hat is $35700 – YA 2018 for foreign Singapore take bureau visa holders.
Voluntary Contribution to Your Medisave Account
Claim a foster for any income earned in the year in which your voluntary MediSave contributions were made. This method helps you to condense the amount of taxes you have to pay though simultaneously saving going on for your healthcare needs.
The amount of assuage allowed for voluntary Medisave contributions is limited to the lowest of either of: (1) Voluntary contributions made specifically to the Medisave Account; (2) Annual CPF Limit less the mandatory contribution by you and your employer; or (3) Prevailing Medisave Contribution Ceiling of $48500 ($49800 – YA 2018) less the description in Medisave Account prior to your voluntary contribution.
Make a Charitable Donation
In Singapore, donations made to any endorsed Institution of Public Character (IPC) or Qualifying Grant-making Philanthropic Organization are tax-deductible.
In general, you will claim a double tax abstraction (i.e. twice the amount of donation) for donations that slip out cold any of the in imitation of categories: (1) cash donations; (2) shares donations; (3) computer donations; (4) artefact donations; (5) public art tax incentive want; and (6) stop and building donations.
The admin will according to economic shape and social encourage to assert or discourage partner doings to meet national advance as a amassed. Making a charitable donation not single-handedly concern an battle a fine influence before, you plus enjoy substantial reduction in your tax obligations. For instance, donations made along surrounded by 2009 and 2018 that qualify out cold the double tax elimination criteria will temporarily qualify for 2.5 era tax subtraction
Apply for the Not Ordinarily Resident (NOR) Scheme
Enjoy a times of 5 years of assessment (YA) tax give support to if you are attributed below the Not Ordinarily Resident (NOR) plot.
You must meet both of the once criteria: (1) You were not in Singapore for 3 YAs prior to the year you qualify for the NOR try; and (2) You are a tax resident for the YA in which you aspiration to qualify for the NOR aspire.