Income Tax for Malaysians Working in Singapore

As a Malaysian in Singapore, you may or may not have to pay taxes depending on what your tax residency status is. Take a look at the various instances where, as a Malaysian, you will be liable to pay income tax in Singapore.

What Makes Malaysians Obligated to Pay Income Tax?

Do you have a work pass valid for at least a year? You will be treated as a tax resident if you do.

What makes you qualify as a tax resident?

  1. You work or live in Singapore for a minimum of 183 days in a year or for a continuous period of 3 years.
  2. You are employed for a minimum of 183 days over a continuous two-year period.

The second point is for Malaysians who entered Singapore on or after 1 January 2007. This, however, does not include public entertainers, company directors, or professionals like coaches or consultants.

Based on the rules of tax residency, when you stop working in Singapore, your tax residency status gets reviewed during tax clearance. If the duration of your stay is not more than 183 days, you are considered a non-resident for tax purposes.

What Constitutes 183 Days?

The days you are employed will include public holidays and weekends. If you are temporarily outside the country for your vacation or a business trip, those days are still counted as your days of employment to aid in deciding tax residency status for you.

How Malaysians Get Taxed as a Resident?

  • You are taxed on all the income you earn in Singapore and on any income from abroad that is paid in Singapore before 1 January 2004.
  • Income earned from abroad paid in Singapore on 1 January 2004 or later will be exempt from taxes (except income earned from partnerships based in Singapore).
  • Income you earn is taxed according to the progressive resident rates after the deduction of applicable tax reliefs.

So, when filing your income tax, please use Form B1, which is for tax residents.

A Quick Look at Tax Implications

Duration of your stay or employment in Singapore Tax residency status How you are taxed
Minimum of 183 days in a calendar year Treated as a tax resident for the year.               You get taxed at the progressive resident rates. You could be eligible for tax reliefs.
3 consecutive years Treated as a tax resident for the three years. You get taxed at the progressive resident rates. You could be eligible for tax reliefs.
Minimum of 183 days over a continuous 2-year period Treated as a tax resident for both the years. You get taxed at the progressive resident rates. You could be eligible for tax reliefs.

How You Are Treated as a Non-Resident

Here is a list that shows you how you are treated as a non-resident in Singapore:

  • You are only taxed on income that is earned within Singapore.
  • Income you earn from employment will get taxed at a 15% flat rate or progressive resident rates, depending on which is higher.
  • You won’t be eligible for tax reliefs.
  • Fees for directors or income earned from rental properties in Singapore are taxed at 22%. For the period before the Year of Assessment 2017, the rate was 20%.

When the time comes to file your income tax, use Form M, which is for non-residents.

Employment for 60 Days or Lesser

As a Malaysian working in Singapore for a period 60 days or lesser during a given year, your income is exempt from tax. As a public entertainer, a company director, or a professional such as a trainer, a coach, or a foreign expert, this rule will not apply.

Implications on Tax for Those Employed for 60 Days or Less During a Year

Tax residency status Implications on income tax
For non-residents                                           You won’t have to pay taxes for income you earn during your short-term employment. The rule won’t apply if:
  • You are a professional like a coach or trainer, public entertainer, or a company director in Singapore.
  • You may be absent from Singapore when it is incidental to your job held within the country. In this instance, Singapore will tax all your income (including income earned while you were abroad) in full.
  • Fees paid to directors and other income will be taxed at 22% (20% before Year of Assessment 2017).
  • You won’t be eligible for tax reliefs.

Implications on Tax for Those Living in Singapore for 61 to 182 Days a Year

Tax residency status Implications on income tax
For non-residents                                                       
  • Income earned from employment will be taxed at progressive rates or 15%, depending on which is higher.
  • Fees paid to directors and other income will be taxed at 22% (20% before Year of Assessment 2017).
  • You won’t be eligible for tax reliefs.

These are the implications for Malaysians who work in Singapore. The duration of your stay and your role in Singapore will determine how much tax you need to pay.

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