Posted on

Budget 2026 – Workforce & Employment Policy Updates

Local Qualifying Salary (LQS) Increase

What is LQS?
The Local Qualifying Salary (LQS) sets the minimum salary that local full-time workers must be paid at companies that hire foreign workers (e.g., Work Permit, S Pass or EP holders). Local workers paid at least the LQS help determine a firm’s foreign worker quota.

Budget 2026 Update:

  • From 1 July 2026, the LQS will be raised from S$1,600 to S$1,800 per month for full-time local employees.

  • Part-time local workers must be paid at least S$10.50 per hour.

  • The LQS is used to compute foreign worker quota as:

    • 1 local workforce count: local employee earning ≥ S$1,800/month

    • 0.5 count: local employee earning ≥ S$900 but < S$1,800

    • Local employees earning < S$900 are not counted toward quota.

Business Impact:

  • Employers hiring foreign workers must budget for higher base salaries for local employees.

  • Workforce planning and foreign worker quota calculations now require adjustment.

  • The change supports wage growth for lower-wage local workers.

Employment Pass (EP) & S Pass Minimum Salary Revisions

Budget 2026 also revised minimum qualifying salaries for foreign skilled passes to better align them with local wage standards as wage levels rise:

Employment Pass (EP) Minimum Salary

  • New pass applicants (from Jan 1 2027):

    • Non-financial sector: S$6,000/month (up from S$5,600)

    • Financial services sector: S$6,600/month (up from S$6,200)

  • Renewal applications will align with these thresholds from Jan 1 2028.

S Pass Minimum Salary

  • New pass applicants (from Jan 1 2027):

    • Non-financial sector: S$3,600/month (up from S$3,300)

    • Financial services sector: S$4,000/month (up from S$3,800)

  • Renewal alignment begins Jan 1 2028.

Business Impact:

  • Companies hiring foreign professionals must factor in higher salary thresholds from 2027/2028.

  • The changes aim to ensure that foreign pass holders’ wages keep pace with local workforce norms.

Posted on

CPF Contribution Changes Effective 1 January 2026

The Central Provident Fund (CPF) contribution adjustments taking effect on 1 January 2026 introduce changes to both the wage ceiling and the contribution rates for senior workers. Employers should assess the financial and administrative impact early, as these updates will directly affect payroll costs, manpower budgeting and HRIS configurations.

Adjustment to CPF Ordinary Wage (OW) Ceiling

From 1 Jan 2026, the monthly OW ceiling will increase from S$7,400 to S$8,000.
Implication:

  • A larger portion of monthly wages becomes CPF-liable.

  • Employers with mid- to higher-income earners will see a corresponding increase in employer CPF contributions.

  • No change to the annual CPF salary ceiling (S$102,000), meaning the combined OW + AW cap remains unchanged.

Increased CPF Contribution Rates for Senior Workers

Higher contribution rates will apply to employees aged 55 to 65, for wages above S$750/month:

Age 55–60

  • Total contribution rate: 32.5% → 34%

  • Employer: 15.5% → 16%

  • Employee: 17% → 18%

Age 60–65

  • Total contribution rate: 23.5% → 25%

  • Employer: 12% → 12.5%

  • Employee: 11.5% → 12.5%

Allocation:
The incremental contribution will be directed fully to the Retirement Account (RA), up to the Full Retirement Sum. Excess, where applicable, will flow into the Ordinary Account.

Impact Assessment for Employers

Payroll Cost Increase

Employers should recalibrate manpower costs, particularly where:

  • The workforce has a significant proportion of employees aged 55–65.

  • Employees earn between S$7,400 and S$8,000, or exceed the current OW ceiling.

  • Annual budgeting cycles begin before 2026, requiring accurate cost forecasting.

HR & Payroll System Updates

System changes will be required to reflect:

  • New CPF wage ceiling (S$8,000).

  • Updated age-indexed contribution rates.

  • Adjustments to payroll formulas, caps, and validation rules.

  • Review of Additional Wage (AW) capping logic in HRIS.

Cash Flow & Accrual Adjustments

Finance teams should:

  • Update monthly accrual models to incorporate higher CPF expenses.

  • Re-evaluate manpower budgets and salary bands for 2026.

  • Ensure accurate forecasting for year-end provisions tied to CPF liabilities.

Transitional and Compliance Considerations

  • Employers should ensure payroll teams are fully briefed before the first 2026 pay cycle.

  • Review and update HR policies, employment contracts (where contribution details are referenced), and staff communication templates.

  • Companies planning workforce restructuring or remuneration reviews should factor in higher CPF cost impact for senior workers.

Recommended Employer Actions

✔ Incorporate new CPF rates into FY2026 budget and manpower plans
✔ Update payroll and HR management systems
✔ Conduct staff cost impact analysis for employees aged 55–65
✔ Communicate upcoming changes to affected employees
✔ Review salary structures and hiring plans in light of increased statutory costs

Posted on

What are ESG Scope 1 and Scope 2

As sustainability reporting becomes mandatory in Singapore, organisations must clearly understand how to classify and measure greenhouse gas (GHG) emissions under internationally recognised standards. The definitions of Scope 1 and Scope 2 are derived from the GHG Protocol and adopted in ISSB/IFRS S2 Climate-related Disclosures, which underpin Singapore’s climate reporting framework.

Emission Calculation Formula

GHG emissions are commonly calculated using the following formula:

Emissions (tCO₂e)  = Activity Data × Emission Factor × Global Warming Potential (if applicable)

Singapore-recommended emission factors are typically sourced from:

  • National Environment Agency (NEA)

  • IPCC (where local factors are unavailable)

Scope 1: Direct Emissions

Scope 1 emissions refer to direct GHG emissions from sources owned or controlled by the organisation. Examples include:

  • Fuel combustion from company-owned vehicles

  • Diesel or natural gas used in generators or boilers

  • Refrigerant leakage from air-conditioning systems

  • Onsite industrial process emissions

Example – Diesel Vehicle

  • Annual diesel usage: 5,000 litres

  • Emission factor: 2.68 kg CO₂e per litre

Emissions = 5,000 × 2.68 = 13,400 kg CO₂e
= 13.4 tCO₂e

Scope 2: Indirect Energy Emissions

Scope 2 emissions cover indirect GHG emissions from purchased electricity, steam, heating or cooling consumed by the organisation. In Singapore, this primarily relates to grid electricity used in offices, warehouses, and factories.

Example – Electricity Consumption

  • Annual electricity use: 50,000 kWh

  • Singapore grid emission factor: 0.408 kg CO₂e per kWh

Emissions = 50,000 × 0.408 = 20,400 kg CO₂e
= 20.4 tCO₂e

Accurately identifying and quantifying emissions is essential for meeting Singapore’s climate reporting requirements and demonstrating environmental accountability. If your organisation requires support in emissions measurement or reporting, our team is ready to assist.

 
 
Posted on

Singapore’s Evolving ESG and Climate-Reporting Requirements

Singapore is entering a new phase of ESG regulation, driven by climate-reporting standards aligned with the ISSB/IFRS framework. The objective is to strengthen transparency, comparability, and market confidence while supporting sustainable finance.

What’s Changing

For SGX-listed companies

  • From FY2025: Mandatory ISSB-aligned climate disclosures, including Scope 1 & 2 emissions.

  • From FY2026: Broader ISSB requirements and mandatory Scope 3 reporting for STI companies.

  • By FY2029: External limited assurance for Scope 1 & 2 emissions.

For large non-listed companies

  • From FY2030: Mandatory ISSB-aligned climate disclosures (Scope 1 & 2) for firms meeting size thresholds.

Why It Matters

  • Listed companies: Must enhance data systems, emissions accounting and governance to meet stricter disclosure and assurance expectations.

  • Large private companies: Need to begin capability-building early due to upcoming obligations.

  • Investors and lenders: Benefit from consistent, comparable and auditable climate information.

  • Singapore’s broader ecosystem: Gains stronger global alignment and improved access to sustainable finance.

Commercial Impact — Procurement

Government and major private buyers now integrate environmental criteria into tender evaluations.
Examples:

  • Government procurement may allocate up to 5% of tender points to environmental factors.

  • Changi Airport Group requires minimum environmental scores to qualify.

  • SMRT assigns a 5% sustainability weighting and requires Scope 3 emissions disclosures from bidders.

ESG compliance is increasingly tied to contract eligibility and competitive advantage.

Conclusion

Singapore’s ESG landscape is advancing rapidly, with mandatory climate disclosures expanding across sectors. Organisations must strengthen reporting capabilities, emissions measurement and governance to stay compliant and competitive.

If your organisation needs support with ESG compliance, climate reporting or tender-readiness, our team can assist at every stage.

Posted on

Phase Two Heightened Third Alert

Update: Enhanced JSS Support from 16 May to 31 August 2021

The enhanced payout corresponding to wages paid for Aug to Oct 2021 will be disbursed in December 2021, while the enhanced payout corresponding to wages paid in Aug 2021 will be disbursed in December 2021. As JSS payouts are intended to offset and protect local employees’ wages, employers who put local employees on mandatory no-pay leave (NPL) or retrench them will not be entitled to the enhanced JSS payouts for those employees.

Enhanced Jobs Support Scheme (JSS) Support

SectorEligibility CriteriaCurrent JSS
Support
(1 Apr 2021 –
15 May 2021)		Enhanced
JSS Support
(16 May 2021
–
13 Jun 2021*)
Food and
Beverage		Entities must be classified under SSICs 56, or 68104. Licensees registered as
individuals will also be included if they make mandatory CPF contributions for their employees.		10%50%
Performing Arts &
Arts Education		Entities must:
• Meet at least one of the conditions of being a: (i) participant in a project, activity, programme or festival supported by the National Arts Council (NAC) or National Heritage Board (NHB) between 1 April 2018 to 31 March 2021; or (ii) Museum Roundtable member before 31 March 2021; or (iii) accredited Arts Education Programme (AEP) provider listed in the 2019-2022 NAC-AEP Directory; or (iv) has more than two-thirds of its business in arts/heritage related activities (as defined by one of the 6 qualifying SSICs in criterion 2); and
• Be classified under SSICs 85420, 90001, 90002, 90003, 90004 or 90009.		10%50%
SportsGyms, fitness studios and other sports facilities that must:
• Be classified under SSIC 93111, 93119, 93120 or 85410; and
• Operate sports- and/or fitness-related programmes that are (i) conducted indoors
without masks on prior to P2(HA); or (ii) for those 18 years and under prior to
P2(HA).		0% 50%
RetailQualifying retail outlets must:
• Have physical storefronts; and
• Be classified under SSICs 47191, 47199, 474, 475, 476, 4771, 47721, 4773,
4774, 47752, 47759, 47761, 47769, 4777, 47802, or 4799.		10%30%
Cinema operatorsEntities must:
• Hold a valid Film Exhibition licence from the Infocomm Media Development Authority (IMDA); and
• Be classified under SSIC 5914.		10%30%
Museums, art
galleries and
historical sites		Entities must:
• Meet at least one of the conditions of being a: (i) participant in a project, activity, programme or festival supported by the National Arts Council (NAC) or National Heritage Board (NHB) between 1 April 2018 to 31 March 2021; (ii) Museum Roundtable member before 31 March 2021; or (iii) accredited Arts Education Programme (AEP) provider listed in the 2019-2022 NAC-AEP Directory; or (iv) has more than two-thirds of its business in arts/heritage related activities (as defined by one of the 6 qualifying SSICs in criterion 2); and
• Be classified under SSICs 91021, 91022, 91029		10%30%
Indoor
playgrounds and
other family
entertainment
centres		Entities must:
• Be classified under SSICs 93201 or 93209; and
• Operate family entertainment centres or family attractions-related businesses.		0%30%
Indoor
playgrounds and
other family
entertainment
centres		Entities must:
• Be classified under SSICs 93201 or 93209; and
• Operate family entertainment centres or family attractions-related businesses.		0%30%
Affected Personal
Care Services		Entities must:
• Be classified under SSIC 96022 or 96029;
• Have physical storefronts; and
• Operate personal care services that require masks to be removed (e.g. facial and
spa)
0%30%

Rental Relief

  • Hawkers and coffeeshop stallholders, who are self-employed and do not benefit from the JSS, the Government will provide one month of rental waiver for hawker stall and coffeeshop tenants of Government agencies
  • For privately-owned commercial properties, some landlords have given rental waivers or rebates to support their tenants during this P2(HA) period. To provide additional support, the Inland Revenue Authority of Singapore (IRAS) will disburse a 0.5-month rental relief cash payout directly to qualifying tenants as part of a new Rental Support Scheme (Annex C). The payout will be disbursed starting from mid-August 2021 and computed based on the latest contractual gross rent within the period 14 May 2021 to 29 May 2021.
  • Separately, property owners who run an SME business or an eligible NPO on their own qualifying commercial property will also be eligible for the cash payout, computed based on the Annual Value of the property (or part of) for Year 2021 as at 14 May 2021.
Most qualifying tenants and owner-occupiers will receive the cash payout automatically without needing to submit an application. The cash payout will not be disbursed automatically to tenants who only rent part of a property, or to tenants who rent a mixed-use property (e.g. a shophouse for both retail and residential use), and/or to licensees. Such businesses should submit an application to IRAS, and provide supporting documents. IRAS will provide more details of the Rental Support Scheme and application process on its website by mid-June 2021.

Further Support For Hawkers​

Ministry of Sustainability and the Environment on 22 May 2021, we will subsidise 100% of fees for table-cleaning and centralised dishwashing services for around 6,000 cooked food stallholders in hawker centres managed by the National Environment Agency (NEA) or NEA-appointed operators during the no dine-in period.

COVID-19 Recovery Grant (Temporary)

One-off support for lower- to middle-income employees and self-employed persons who are financially impacted as a result of the tightened measures. Individuals who experience at least one month of involuntary NPL or income loss of at least 50% for at least one month, during the period between 16 May 2021 and 30 June 2021 may apply for CRG-T. 

  • Eligible individuals placed on involuntary no-pay leave may receive a one-off payout of up to $700
  • Those experiencing significant income loss may receive a one-off payout of up to $500
  • Applications will be open from 3 June 2021 to 2 July 2021.

Enhanced COVID-19 Driver Relief Fund

  • From 16 May 2021 to 30 June 2021, from $450/month/vehicle to $750/month/vehicle
  • Changi Airport Group also announced that retailers in Changi Airport terminals would have their rental fees fully waived for the period of closure, from 13 May 2021 until 13 June 2021

Sports Resilience Package

Sport and Fitness Operating Grant

  • The grant has been rolled out to provide additional support for over 500 entities, in particular gyms and fitness studios
  • Those eligible for this grant will receive a one-time disbursement, which takes overhead costs such as rental and salaries into account, ranging from $5,000 to $100,000 for the three-week period (May 8-30)

Who can apply?

  1. Businesses under SSIC code 93111: Fitness studios and gymnasiums;
  2. Have received JSS support; and
  3. Sign a written undertaking on preserving jobs, compliance with SafeEntry implementation, and adoption of the SGClean Quality Mark, which will be included in the letter of offer provided to successful applicants for acceptance.

Note: Businesses of similar nature but have different SSIC codes i.e. 85410, 93119, 93120 can apply for Sport Singapore’s assessment.

SEP Project Grant

  • Aims to support about 300 projects – thrice the original number – that help self-employed people collaborate with each other and develop initiatives targeted at enhancing the health and wellness of Singaporeans
  • Successful grant applicants, who can work individually or with others, may obtain up to $25,000 in funding per project

Sport and Fitness SEP Support Fund

  • Those who have experienced at least 50 per cent income loss during the three weeks will be eligible for a one-time cash assistance of up to $400

Continuing Coach Education (CCE) Training Allowance Grant

  • Fitness instructors can claim $7.50 for every claimable hour for the CCE training, programme or event up to a maximum of $300 per person until March 31, 2022
  • These include CCE courses facilitated by CoachSG, ExPRO Fitness on-demand online learning content and events, and courses offered under Union Training Assistance Programme as endorsed by the National Instructors and Coaches Association
Posted on

Setting up a Singapore Family Office

What is a Singapore Family Office (SFO)?

A Singapore Family Office usually refers to an entity which manages assets for or on behalf of only one family and is wholly owned or controlled by members of the same family. The term ‘family’ in this context refers to individuals who are lineal descendants from a single ancestor, as well as the spouses, ex-spouses, adopted children and step children of these individuals.

SFOs are exempted from engaging in fund management and financial advisory activities from licensing requirements. Under the statutory exemptions, an SFO may be exempted from licensing requirements if it was structured as either (a) a corporation which manages funds for its related corporations, or (b) a corporation that provides financial advisory services to its related corporations.

Requirements to be a SFO

MAS may consider the following to be of a SFO arrangement:

  • where there is no common holding company, but the assets managed by the SFO are directly held by natural persons of a single-family;
  • where assets are held under a  discretionary trust, the settlor of the trust and the beneficiaries are members of the same family;
  • where a family trust is set up for charitable purposes, the charitable trust is funded exclusively by settlor(s) from a single-family; and
  • where non-family members such as key employees of the SFO are shareholders in the SFO for the purpose of alignment of economic interest and risk-sharing, the initial assets and additional injection  of funds are funded exclusively by a single-family.

The business would need to have an interview with the MAS, which we will help to coordinate and prepare the client for.

Tax Exemption

After incorporation of the Single Family Office, various holding companies would be incorporated under the family office structure. There are some conditions that must be met if the corporation wants to qualify for the Enhanced Tier Fund Tax Exemption Scheme (also known as Section 13X).

For example, the office would need to hire at least three investment professionals, invest at least S$50 million into the fund entity and have local business spending of at least $200,000 a year.

The business would have to go through an interview with the MAS, which we will help to coordinate and prepare the client for as well as to see an investment strategy before granting approval for the business to qualify for Section 13X tax exemption.

The 13X exemption allows specified income derived from certain designated investments to be exempted from tax. The designated investments include a wide range of assets such as stocks, shares, securities and derivatives.

Tax Incentives

Family offices in Singapore could apply for a tax incentive under the Financial Sector Incentive-Fund Management Scheme (FSI-FM) which incentivises fund management and the provision of investment advisory services in Singapore.

Under this scheme, fee income derived by a Singapore fund manager from managing or advising a qualifying fund is taxed at a rate of 10% instead of the usual corporate tax rate of 17%. 

To qualify for the scheme, a fund manager must hold a Capital Markets Services (CMS) licence, employ at least 3 experiences investment professionals earning at least S$3,500 per month and have a minimum AUM of S$250 million. This is very relevant for large family offices, where the scale of operations and the income derived from managing or advising qualifying funds could be substantial.

Operational Requirements

The company must first decide where the family office will be located in order to set up the family office. Other administrative tasks include establishing family governance guidelines and come up with a Family Constitution, opening of bank accounts, implementing IT systems for portfolio aggregation and so on.

Posted on

China’s Income Tax Policy in Relation to Overseas Income

On 17 January 2020, China’s Ministry of Finance and State Taxation Administration jointly issued the “Announcement on Individual Income Tax Policy in relation to Overseas Income” (Ministry of Finance and State Taxation Administration Announcement 3 of 2020). This announcement applies from the 2019 tax year. This means that income earned overseas by China tax residents will be taxed. 

Announcement 3 sets out the relevant policies regarding this new income tax policy. The key contents include:

  • Classification of overseas income
  • Calculation of taxable income
  • Foreign tax credit (“FTC”)

Residence rules

An individual is domiciled in China if:

(a) They habitually reside in China by reason of permanent registered address, family ties, or economic interests; or

(b) holds a Chinese passport or a hukou (household registration).

Classification of Overseas Income

The following categories of income are considered as overseas income:

Income categoriesBasis of income sourcing
(1) Income from provision of labour services outside China (including employment income and independent personal service income)The overseas location where the labour or employment activities are carried out.
(2) Authors’ remuneration paid and borne by enterprises and other organisations outside China;The overseas location of the enterprise or organisation which pays and bears the remuneration.
(3) Royalties received from the grant of concessions outside China;The overseas location where the concessions are utilised.
(4) Income from business operations and productions outside China;The overseas location where business operation or production is carried out.
(5) Interest and dividend income obtained from enterprises, other organisations and non-resident individuals outside China;The overseas location where the interest and/or dividend paying parties are based.
(6) Income from lease of overseas properties;The overseas location where the leased property is used.
(7) Capital gains from the transfer of real estate, transfer of equity stocks, stock options, or other financial assets (hereinafter referred to as financial assets) of overseas enterprises or other organisations, or from the transfer of other assets outside China;Real estate: the overseas location where the asset is located; Financial assets: the overseas location where the invested enterprise or other organisation is based. It is worth noting that if more than 50% of the fair value of the assets of the invested enterprise or other organisation comes directly or indirectly from real estate located in China at any time during the three years (36 consecutive months) prior to the transfer, the gains from the transfer of the assets would be deemed as China sourced.
(8) Incidental income obtained from enterprises, other organisations and non-resident individuals outside China;The overseas location where the incidental income paying parties are based.
(9) Separate rules may apply if otherwise determined by the Ministry of Finance or the State Taxation Administration.N/A

Personal Income Tax Rate

The following table shows the latest Income Tax Rate for residents in China.

Annual taxable income (CNY)Tax rate (%)Quick deduction (CNY)
0 to 36,00030
Over 36,000 to 144,000102,520
Over 144,000 to 300,0002016,920
Over 300,000 to 420,0002531,920
Over 420,000 to 660,0003052,920
Over 660,000 to 960,0003585,920
Over 960,00045181,920

How to calculate Taxable Income?

Domestic and foreign income subject to consolidated tax calculation

Comprehensive income

Annual comprehensive income = comprehensive income within China + comprehensive income from overseas

Income from business operations

Annual operating income = income from domestic operations + income from overseas operations

Losses from business operations in a particular overseas jurisdiction cannot be offset against income from operations in China or other overseas locations. However, the losses may be used to offset business operating income at the same location in future tax years, based on the relevant tax law in China.

Domestic and foreign income subject to separate tax calculation

Income derived from interest, dividends, property lease, property transfer, and incidental income cannot be consolidated with China-sourced income and shall be subject to tax calculation separately.

Foreign Tax credit ("FTC")

Announcement 3 makes it clear that where resident taxpayers receive overseas income during a tax year, FTC will be granted where foreign income tax has been paid in the overseas location in accordance with the tax law in that jurisdiction, subject to limits. The formula is as follows:

Tax / refund due for the tax year = total tax liability for the tax year – overseas tax liability allowable as credit (not exceeding the tax credit limit)

The amount of overseas tax exceeding the tax credit limit can be utilised in the following five tax years.

Overseas income not allowed for FTC

The following are the circumstances that are not allowed and shall be excluded from the FTC claim:

  1. Overseas tax paid or collected by mistake;
  2. Tax which should not be levied in the overseas jurisdiction under the Double Tax Treaty between China and the foreign country (or under the Double Tax Arrangement between Mainland China and Hong Kong and Macao);
  3. Late payment interest and/or penalties imposed by overseas tax authorities for underpayment or late payment of overseas income tax;
  4. Overseas income tax which is due for refund or compensation from the overseas tax authorities;
  5. Overseas income which is tax-exempt under the China IIT Law and Implementation Rules.

Singapore’s Tax Treaty with China

As there is an agreement between The Government of The Republic of Singapore and The Government of The People’s Republic of China, China residents receiving an income from Singapore or vice-versa, will be eligible for double tax relief if conditions are met. However, this is not an exemption of tax, but rather a reduction of tax.
According to Article 22 of the treaty, elimination of double taxation in China shall be eliminated as follows:

(a) Where a resident of China derives income from Singapore the amount of tax on that income payable in Singapore in accordance with the provisions of this Agreement, may be credited against the Chinese tax imposed on that resident. The amount of the credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China.

(b) Where the income derived from Singapore is a dividend paid by a company which is a resident of Singapore to a company which is a resident of China and which owns not less than 10 per cent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Singapore by the company paying the dividend in respect of its income.

In Singapore, double taxation shall be avoided as follows:

(a) Where a resident of Singapore derives income from China which, in accordance with the provisions of this Agreement, may be taxed in China, Singapore shall, subject to its laws regarding the allowance as a credit against Singapore tax of tax payable in any country other than Singapore, allow the Chinese tax paid, whether directly or by deduction, as a credit against the Singapore tax payable on the income of that resident.

(b) Where such income is a dividend paid by a company which is a resident of China to a resident of Singapore which is a company owning directly or indirectly not less than 10 per cent of the share capital of the first-mentioned company, the credit shall take into account the Chinese tax paid by that company on the portion of its profits out of which the dividend is paid.

Note:

Singapore employment income is not taxed in China according to the provisions of Articles 16, 18 and 19 of the treaty, salaries, wages and other similar remuneration derived by a resident of a Singapore State in respect of an employment shall be taxable only in Singapore unless the employment is exercised in the China. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in China.

When it comes to profits earned from interest, royalties and dividend payments, special reduced rates apply, as follows:

Dividends

Dividends paid by a company which is a resident of China to a resident of Singapore may be taxed in Singapore.

However, such dividends may also be taxed in China of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of Singapore, the tax so charged shall not exceed:

(a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital in the enterprise paying the dividends;

(b) in all other cases, dividend payments are taxed at a rate of 10%.

Interest

Income arising from interest issued by a bank or financial institution which is a resident of China to a resident of Singapore, may be taxed in Singapore.

However, such interest may also be taxed in China of which the bank or financial institution paying the interest is a resident and according to the laws of that State, but if the beneficial owner of the interest is a resident of Singapore, the tax so charged shall not exceed:

(a) 7 per cent of the gross amount of the interest if it is received by any bank or financial institution

(b) 10 per cent of the gross amount of the interest in all other cases.

Royalties

Royalties in this treaty means payments of any kind received as consideration for the use of, or the right to use, any copyright of literacy, artistic or scientific work including cinematograph films, or films or tapes for radio or television broadcasting, any computer software, patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience.

These royalties derived from China and paid to a resident of Singapore, may be taxed in Singapore, and vice-versa.

However, if the beneficial owner of the royalties is a resident of Singapore, the tax charged shall not exceed 10 per cent of the gross amount of the royalties.  

Posted on

Half day on 3 August 2018

In remembrance of our late founder, Mr Ng Kem San, who passed away on 27 July 2018, the office will be closed early on 3 August 2018 at 1pm.