Are you a first-time tax payer? Navigating the tax terminology can get a little confusing; here’s a quick breakdown of what paying your taxes entail!
The personal income tax rate in Singapore is among one of the lowest in the world. The country’s tax system is built on a progressive tax scheme; which means the more you earn, the higher the amount of taxes you need to pay.
Before paying your taxes, don’t forget to indicate which tax reliefs you are eligible for. Tax reliefs can reduce the amount of income you will be taxed on, which means you pay lower taxes. There are a few types of tax reliefs and rebates applicable on certain conditions; if you are a Singapore tax resident and you meet the qualifying conditions.
Here are the reliefs available to all taxpayers:
- Course Fees Relief
- CPF Cash Top Up Relief*
- CPF Relief*
- CPF / Provident Fund Relief: For Employees Only
- CPF/ Provident Fund Relief: For Self-Employed/ Employee who is also Self Employed
- CPF/ Provident Fund Relief: Compulsory and Voluntary Medisave Contribution
- Earned Income Relief
- Handicapped Brother/ Sister Relief
- Life Insurance Relief
- NSman (Self) Relief
- Parent/ Handicapped Parent Relief (For maintenance of parents, grandparents & great-grandparents, including in-laws)
- Supplementary Retirement Scheme (SRS) Relief
*Applicable to Singapore Citizens and Singapore Permanent Residents only.
Another point to note is that Singapore has a tax deduction of 250% for qualifying donations; applicable till 31 December 2021. For example, for every $1 you donate to a registered charitable organisation, $2.50 will be deducted from your taxable income.
Last but not least, remember to get your taxes filed by these dates: 18 April 2019 for e-filing and 15 April 2019 if you are filing via paper return.
Need some help? You might like to connect with your financial services consultant to know more.