Foreign income refers to earnings generated from outside Singapore. Typically, this income is subject to taxation in Singapore when it is remitted and received in the country. If the foreign income is generated from a trade or business conducted in Singapore, it is taxable upon accrual, regardless of whether it is physically received in Singapore.

In many instances, foreign income may be subject to double taxation—first in the foreign jurisdiction and then again in Singapore.

To mitigate the impact of double taxation, Singapore tax residents can benefit from several tax reliefs, including:

a) Exemption or reduction in tax on specified foreign income derived from jurisdictions that have an Avoidance of Double Taxation Agreement with Singapore.

b) Tax exemption on certain foreign-sourced income, such as foreign dividends, branch profits, and service income, under Section 13(8) of the Income Tax Act 1947.

c) Foreign tax credit, which allows taxes paid in a foreign jurisdiction to be credited against the Singapore tax payable on the same income.

 

If you need assistance with foreign sourced tax matters for your company, do contact [email protected].

 

Yours sincerely,

The editorial team at Raffles Corporate Services