Dividend Tax in Singapore
When you hold a stake in a company, the profits you receive from it are called dividends. You could receive your dividend in cash or even in the form of company shares.
In the year it is decided dividends are payable, they begin to accrue. While you may have to pay tax on some dividends, you won’t have to for others. Take a look at some of the taxable and non-taxable options below.
What are Non-Taxable Dividends?
Since 1 January 2008, shareholders won’t get taxed if dividends are paid by a resident company of Singapore. You don’t have to pay tax for income derived from some dividends if:
- A resident company of Singapore paid a dividend on 1 January 2008 or later. This is applicable if it falls under the one-tier corporate tax system (excluding co-operatives).
- Dividends paid to resident individuals from abroad on 1 January 2004 or later. When dividends are paid to a resident individual from a foreign source from a partnership based in Singapore, they may be exempt from tax. This is subject to certain conditions.
- Dividends paid from Real Estate Investment Trusts or REITs. This does not include dividends paid from a partnership based in Singapore, or from running a business, profession, or trade in REITs.
Examples of Non-taxable Dividends
- Dividends earned from companies listed on the Singapore Stock Exchange. These are mentioned in the Central Depository Pte Ltd’s statement.
- Dividends earned from private resident companies.
- Dividends earned from eligible Central Provident Fund investment scheme agent banks. These will be displayed in the Annual Dividend Statement or ADS.
- Singapore dividends earned through unit trusts.
- FairPrice dividends from the NTUC (excluding dividends earned from co-operatives).
- Dividends earned through the share buyback option of Special Trading Counters or STC.
What are Taxable Dividends
You will have to pay tax for dividends you earn if:
- The dividends are from co-operatives.
- They are earned overseas by individuals through partnerships based in Singapore. In some instances they may be tax free, subject to certain conditions.
- Your dividend earnings are from Real Estate Investment Trusts or REITs. This is income specifically earned from partnerships based in Singapore. They can also be earned through business, trade, or working in a REIT.
Example of Taxable Dividends
- Dividends earned from NTUC FairPrice Co-operative Ltd.
- Income from the Singapore Police Co-operative Society Ltd.
- Earnings from NTUC Healthcare Co-operative Ltd.
- Dividends from MCCY Registry of Co-operative Societies.
How You Should Report Dividends
Once you have determined that your dividend is taxable, you should declare it in your tax return under “Other Income”. Sometimes the organisation that pays the dividend specifies they will deliver the information to IRAS in the dividend voucher. In this instance, you won’t have to declare your dividends in the tax form.