Taxable & Non-Taxable Income - IRAS

Your company has to pay tax in Singapore on taxable income that is:

• Accrued in or derived from Singapore; or
• Received in Singapore from outside Singapore.

For example, the income from a business carried on in Singapore is regarded as accrued in or derived from Singapore.

For Singapore tax purposes, taxable income refers to:

• Gains or profits from any trade or business
• Income from investment such as dividends, interest and rental
• Royalties, premiums and any other profits from property
• Other gains that are revenue in nature

Deductions such as business expenses, capital allowances and reliefs can be claimed to reduce taxable income. This leads to lower taxes.

Income Received in Singapore from Outside Singapore

Under Section 10(25) of the Income Tax Act 1947, income from outside Singapore is considered received in Singapore when it is:

1. Remitted to, transmitted or brought into Singapore;
2. Used to satisfy any debt incurred in respect of a trade or business carried on in Singapore; or
3. Used to purchase any movable property (such as equipment, raw material, etc.) brought into Singapore.

Section 10(25) is applied to tax foreign income received in Singapore only if the income belongs to an individual* who is resident in Singapore or an entity that is located in Singapore.

Non-resident individuals and foreign businesses that are not operating in or from Singapore can remit their foreign income to Singapore without being taxed on the income.

As an administrative concession, foreign income that is reinvested overseas without being repatriated to Singapore is not considered received in Singapore at the point of reinvestment. This means that the taxation of the foreign income is deferred until the investment is sold and the proceeds are brought into Singapore.

If the foreign-sourced income is subject to tax in Singapore and overseas, tax reliefs may be available to alleviate the double taxation suffered. Learn more about tax reliefs on foreign income.

* All foreign-sourced income received in Singapore by resident individuals, except those received through a Singapore partnership, is exempt from tax where the Comptroller of Income Tax is satisfied that the exemption is beneficial to them.

Reporting income received in Singapore from outside Singapore

When foreign income is considered received in Singapore, companies must declare their income in their tax returns and ensure that it is brought to tax. Companies are expected to track the movement of their foreign income and maintain records to substantiate their treatment.

[New!] With effect from the Year of Assessment (YA) 2024, companies# are required to provide the following information in their tax computation:

• Unremitted foreign income brought forward from prior YAs
• Foreign income earned in the current financial year
• Foreign income received in Singapore during the financial year
• Foreign income used during the year and not received in Singapore
• Unremitted foreign income carried forward
• Tracking of allowable expenses attributable to the foreign income if the company is electing for the liberalised treatment of expenses incurred in Singapore

This reporting requirement will ensure that companies keep track of their foreign income and accurately report their taxes when the foreign income is considered received in Singapore. To make it easier for companies to comply with the reporting requirement, IRAS has developed the standard template below for companies’ reference. While we strongly encourage companies to use this template, companies may continue using their existing templates for tracking foreign income, as long as they include all the required information. Companies may also modify the standard template to include additional information and details.

• Standard Template of Foreign Income Tracking Schedule (XLSX, 13KB) with explanatory notes (PDF, 153KB)
• Illustrative examples (PDF, 167KB)

# Companies that qualify to file Form C-S/ Form C-S (Lite) are required to prepare and retain the schedule, and submit it to IRAS upon request.