Singapore digital nomads tax is a topic you would want to look into if you are planning to visit Singapore or even plan on moving there.
Do I pay taxes in Singapore if I work remotely there? What taxes do apply in Singapore and how can I use the rules to my advantage? These are all questions we’ll discuss in this article.
Do I need to Pay Tax in Singapore if I Work Remotely?
Whether or not you have to pay taxes in Singapore if you work remotely from the country depends on a few elements.
The first question is if you will become a tax resident of Singapore or not. We’ll discuss the criteria for this more into detail in one of the next sections.
The next question is where does your income come from: do you work for a Singapore company or for a foreign company.
Answering these questions is important to distinguish between your possible tax liability in Singapore. Singapore applies a territorial tax system. That means that in principle you only need to pay taxes in Singapore on local source income.
However, if you perform your services from within Singapore, foreign income will actually be subject to taxes in Singapore if you are a tax resident of Singapore.
If you remain a non-resident for tax purposes, you will only have to pay taxes on income from a Singapore source.
Basically, this means that if you just work remotely from Singapore for a brief time and don’t become a tax resident, you won’t be liable on your foreign income.
Nevertheless, if you spend so much time in Singapore that you become a tax resident, the outcome might be different and you might have to pay taxes on income from overseas if you perform your work from within Singapore.
Taxes in Singapore
Let’s have a look at the different taxes you can expect to pay if you become a tax resident of Singapore.
Singapore Personal Income Taxes
We already mentioned that Singapore applies a territorial tax regime. Let’s now have a closer look at this.
That means that if you work in Singapore for a local employer, you’ll have to pay taxes in Singapore on this income. However, you’ll get an exemption from taxes if you work there for less than 60 days.
Also, if you work for a foreign company but you are a tax resident of Singapore and perform your work there, Singapore taxes will apply.
In case you become a tax resident of Singapore, you’ll have to pay progressive tax rates up to 24%. However, you would only pay this top rate if you have an income of more than SGD 1.000.000 or around EUR 700.000.
As a non-resident with income from Singapore, the standard tax rate is 24%. However, for employment income you can expect to pay 15% or the taxes according to the progressive tax rates, whatever is highest.
Under the territorial tax system, passive income from abroad is in principle not taxable in Singapore. An example would be investment income that you receive from abroad.
Thus, it’s not always as easy as just sourcing your income from a foreign source to make sure you can live a tax free life in Singapore. If you perform your work from Singapore, you can still end up paying taxes on this income.
Social Security Contributions in Singapore
If you are a Singapore citizen or permanent resident working in Singapore, you’ll also have to pay social security contributions to the Central Provident Fund (CPF) in order to save up for retirement.
Employers need to pay 17% in contribution and employees 20%. People older than 55 years can be subject to lower rates. Also are there special transition measures with different rates for foreigners who become liable to these contributions for the first time.
It’s also important to note that the contributions are capped. They are calculated on a maximum income of SGD 7.400 (EUR 5.150) for 2025 and SGD 8.000 (EUR 5.550) from 2026 on.
On top of the Central Provident Fund, you an also make voluntary payments to the Supplementary Pension Scheme (SPS). These contributions are tax deductible up to a certain threshold.
Opposite to the CPF, the SPS is also open to foreigners who are not a permanent resident but who work in Singapore.
Taxes on Investment Income
In Singapore, you don’t have to pay income taxes on dividends and interest received from local companies.
Because of the territorial tax regime, foreign investment income is also not subject to any income taxes. Yet, an exemption to this rule could apply in case the income is received through a partnership in Singapore.
Singapore doesn’t levy any taxes on capital gains. Nevertheless, this only applies to the extent you’re not engaging in active trading.
So, in principle you would be able to receive all your investment income tax free in Singapore.
Benefits of Singapore Tax Residency
Many people look at Singapore because they are attracted by the territorial tax regime. However, as we already discussed, this doesn’t mean that all the income you source from abroad in necessarily fully tax free.
So, with the right setup or the right kind of income, Singapore is a place that can offer you a tax free lifestyle if you are able to fully benefit from their territorial tax system.
Yet, this will work best for people with a company overseas in which they’re not actively involved or other more passive investments. If you’re still actively working in your business and you do this from Singapore, you’ll still have to pay income taxes.
For this reason, Singapore is more a tax haven that suits high net-worth individuals who have a more passive role or don’t run their main operations out of Singapore. If you are still building out your business actively, you might not able to benefit from the tax exemptions to its full extent.
Yet, Singapore does still offer relatively attractive tax rates compared to many other countries. However, the cost of living in the country is also rather high.
Tax Residency Requirements in Singapore
You can become a tax resident of Singapore in different ways. However, it basically comes back to the fact that Singapore applies both the days test and the centre of vital interest test.
Under the days test you become a tax resident if you spend 183 days or more in the country during the tax year.
When they look at your centre of vital interest they’ll assess if you reside in Singapore and your absences from the country are temporary and reasonable.
An exemption applies to foreigners who comes to work. They can become tax resident if they start working in Singapore while spending at least 183 days consecutively throughout two tax years. This is known as the two-year administrative concession.
In this case, you would only need to be in the country for 6 months continuously divided over two tax years. In this respect it’s important to know that the tax years in Singapore follow the calendar year.
Incorporating a Company in Singapore: Advantages for Digital Nomads
Another way to benefit from the tax system in Singapore is to set up a company there.
Companies will have to pay corporate tax according to the same territorial tax principle.
If you actively trade from within Singapore, your company will pay corporate tax in Singapore. If you don’t trade from within Singapore, you can get an exemption from Singapore corporate tax bases on the territorial tax system.
If you operate a service business, this means you must demonstrate that you have a fixed place of operations abroad in order to get an exemption from corporate tax.
Thus, if you do work from Singapore, this won’t be the case. Furthermore, having a fixed place of business abroad can lead to adverse tax consequences in that other country because you can have a permanent establishment there.
You can find some more examples in this respect on the website of the Inland Revenue Authority of Singapore (IRAS).
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Reach out, if you want to know if Singapore is a good place to have tax residency for your specific case. Maybe, there are even better places for you of which. you didn’t think before!
