Recently we have had a few clients coming to us to tell us that since their company receives income from overseas and their goods do not come into Singapore, the income that the company earns does not attract income tax in Singapore.

When I ask them for where they get this information, they bring me to this page: https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/what-is-taxable-what-is-not/income-received-from-overseas

I have reproduced this page in this image above. If you focus on the top portion of the page, this is with reference to personal income taxes. For example, if you are working in Hong Kong and you live in Hong Kong and are a tax resident of Hong Kong, then you will pay personal income taxes in Hong Kong.

Please note that the page is with reference to individual income taxes.

For companies receiving foreign income, the relevant IRAS guide is on this page: https://www.iras.gov.sg/taxes/corporate-income-tax/income-deductions-for-companies/companies-receiving-foreign-income

 

It states that foreign income derived from outside of Singapore is taxable. This is when the income is remitted and received in Singapore. Therefore, if a company receives the income in its Singapore bank account, this income is deemed to be remitted and received in Singapore. Therefore, even though a company buys good in country A, say Indonesia, and sells it to company B, say China, and the money is deposited in a Singapore corporate bank account, say OCBC, this income is taxable.

However, if the income is not deposited into a Singapore bank account, then this income may not attract Singapore corporate tax.

If you have any queries about companies receiving foreign income, you can email us at [email protected].

 

Yours sincerely,

The editorial team at Raffles Corporate Services