Dividend Tax in Singapore
Dividend Tax in SingaporeUpdated on Monday 11th January 2016
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Dividends represent the part of profit to which a shareholder is entitled to, given in accordance with the share ownership he or she has in a company; dividends are taxed in a company, as they represent a form of income. Dividend tax in Singapore is applicable to most business entities, but the Singaporean legislation provides several dividend tax exemptions; our team of lawyers can offer you more information on the taxes imposed on dividends.
Taxable dividends in Singapore
Not all dividends are taxable in Singapore; as a part of one-tier taxation system, companies which are tax residents in Singapore are not taxed on dividends; resident companies in Singapore are allowed to issue one-tier dividends, which means that shareholders won’t be taxed on the income received from dividends. One tier system has been enforced in Singapore starting with 1st of January 2003 and our law firm in Singapore can provide you with further information on this law.
Singaporean legislation applies the dividend tax in the following situations:
• co-operatives paid dividends are taxed for the issuance of such dividends;
• foreign source dividends received though a partnership in Singapore;
• real estate investment funds are taxed on the income distribution derived by individuals in a partnership.
Tax exempted dividends in Singapore
Starting with 1st of January 2008, dividends that have to be paid by a Singaporean company are not subjected to a dividend tax. Individuals who are residents of Singapore, receiving foreign dividends, are also exempted from paying the dividend tax; the provision is available since 1st of January 2004. Income distributions derived from a real estate investment fund are also exempted of dividend tax.
Under the Income Tax Act, the profits of a foreign branch with operations in Singapore are not imposed with a tax on dividends.
Resident companies in Singapore paying dividends are not imposed with paying a withholding tax on dividends; our lawyers in Singapore can offer you an in-depth presentation on the dividend legislation.
If you need further information on the dividend tax in Singapore, please contact our Singaporean law firm.