A Singapore business may be required to withhold tax when making certain payments to a non-resident company, professional or director.
Common payments that may be subject to Withholding Tax include:
- Interest and loan-related charges;
- Royalties;
- Software, intellectual-property or technical-information fees;
- Management, technical or consultancy services performed in Singapore;
- Non-resident directors’ fees and professional fees.
The correct treatment depends on the nature of the payment, where the services are performed, the recipient’s tax status and the applicable Double Taxation Agreement.
1. Determining the Payment Date
Except for certain directors’ fees, the relevant payment date is generally the earliest of:
- The contractual due date;
- The date the amount is credited to the non-resident;
- The actual payment date.
Where the contract does not specify a due date, IRAS generally treats the invoice date as the payment date. Credit terms of 30 or 60 days normally do not postpone the WHT deadline.
2. Filing and Payment Deadline
WHT must be filed and paid by the 15th day of the second month following the payment month.
Example:
- Payment date: 20 July 2026
- Filing deadline: 15 September 2026
The filing should be completed through myTax Portal.
3. DTA Relief and Certificate of Residence
A Double Taxation Agreement may reduce the WHT rate or provide an exemption.
Treaty relief is not automatic. The Singapore payer will generally need a Certificate of Residence issued or certified by the recipient’s foreign tax authority.
The COR should:
- State the relevant year;
- Be issued or certified by the foreign tax authority;
- Be in English or accompanied by an English translation.
For treaty relief claimed on payments made in 2026, the COR is generally due by 31 March 2027. For earlier-year payments, it is generally due within three months from the WHT filing date.
A WHT return may still be required even where the applicable treaty rate is 0%.
4. Key Developments for 2026
Corporate Income Tax Rebate
The YA 2026 Corporate Income Tax Rebate is separate from WHT. It does not automatically reduce the tax that must be withheld from payments to non-residents.
Electronic Refunds
From 1 January 2026, IRAS no longer issues WHT refunds by cheque. Refunds are processed through methods such as:
- GIRO;
- PayNow Corporate;
- Telegraphic transfer.
Royalty Concession Changes
The tax concession for certain royalty income earned by authors, composers and choreographers is being phased out. This should not be confused with the general treatment of software, trademark or patent payments.
5. Late-Payment Penalties
Where WHT is not paid on time, IRAS may impose:
- An initial penalty of 5% of the unpaid tax;
- An additional 1% for each completed month after 30 days;
- A maximum additional penalty of 15% of the unpaid tax.
6. Practical Example
A Singapore company pays S$50,000 to an overseas supplier for a software licence.
The company should not automatically apply a 10% WHT rate. It should first consider:
- Whether rights to reproduce, modify or commercially exploit the software are granted;
- Whether copyright or technical information is involved;
- Whether the payment is a royalty;
- Whether treaty relief applies;
- Whether a valid COR has been obtained.
Compliance Recommendations
Before paying an overseas supplier, businesses should confirm:
- The recipient’s tax-residence status;
- The nature of the payment and place of performance;
- The contractual, invoice and actual payment dates;
- The domestic WHT rate and DTA treatment;
- The COR submission deadline;
- The WHT filing and payment deadline.
For complex cross-border payments, the WHT review should be completed before the contract is signed or payment is released.
Disclaimer: This article is for general information only and does not constitute tax, legal or accounting advice.
