Singapore Income Tax 2025: How the IRAS System Works + Filing Tips

Discover everything about Singapore Income Tax 2025. Learn how IRAS works, understand chargeable income, tax rates, rebates, deadlines, and tips to file accurately.

Introduction

Understanding income tax in Singapore is more than just a statutory obligation—it’s a critical aspect of financial literacy and smart money management. Whether you're a salaried employee, a freelancer, a landlord, or an investor, knowing how Singapore’s tax system operates empowers you to file accurately, take full advantage of legal reliefs, and avoid costly mistakes.

This guide provides a detailed explanation of how income tax works in Singapore, the role of the Inland Revenue Authority of Singapore (IRAS), and the current 2025 tax structure, including thresholds and compliance rules.

How the Singapore Tax System Works in 2025

Singapore follows a territorial tax system, which means you are only taxed on income earned within Singapore or income received in Singapore from overseas. This unique feature sets it apart from many countries that impose tax on global income.

The country’s income tax regime is known for being:

• Simple and transparent
• Progressive, ensuring higher earners pay more tax
• Business-friendly, with low corporate tax rates and no capital gains tax

What Is Chargeable Income?

Chargeable income is your total taxable income minus allowable deductions, tax reliefs, and approved donations. Types of taxable income include:

1. Employment income (salary, bonuses, benefits)
2. Rental income from properties
3. Business income (for self-employed and freelancers)
4. Certain investment income (e.g., dividends from non-exempt sources)

Non-taxable income includes:

1. Capital gains (e.g., sale of shares, properties)
2. Foreign-sourced income not remitted into Singapore (with exceptions)

Understanding what constitutes taxable vs. non-taxable income helps you avoid overpaying taxes and ensures accurate declarations.

Singapore’s Tax Calendar and Year of Assessment

Singapore’s tax year operates on a preceding-year basis. For example, Income earned from 1 Jan to 31 Dec 2024 is assessed in YA 2025

This means that when you file your income tax return in 2025, you are declaring income earned during 2024. For YA 2025, the filing deadline was 18 April 2025 for individuals. Late filings are subject to penalties, which can escalate to legal action in severe cases.

Planning your tax obligations early—by tracking your income sources and gathering supporting documents—helps you file smoothly and take advantage of available tax reliefs.

Role of IRAS: What Taxpayers Must Know

The Inland Revenue Authority of Singapore (IRAS) is the central agency responsible for administering and enforcing income tax laws. It also handles property tax, Goods and Services Tax (GST), and stamp duties.

IRAS provides a comprehensive set of services through its digital platform, the myTax Portal, which allows you to:

1.     File your income tax returns online

2.    View your Notice of Assessment (NOA)

3.    Make payment arrangements or refunds

4.   Apply for tax reliefs or amendments

5.    Check your tax filing status and deadlines

IRAS Penalties and Compliance Enforcement

IRAS uses a combination of digital automation and analytics to enforce compliance. Here’s what to note:

• Late filing penalty: Starts from S$200 and can go up to S$1,000 or more
• Failure to file: May result in summons or court prosecution
• Incorrect returns: If you file incorrect information without reasonable excuse, you may face additional penalties of up to 200% of the undercharged tax

To stay compliant:

• File your returns by the deadline (typically 18 April)
• Keep accurate records and supporting documents
• Use the IRAS chatbot or helpdesk if unsure

the "No-Filing Service (NFS)" automatically pre-fills return for eligible taxpayers, but verification is required by 18 Apr

Income Tax Rates for YA 2025 (Residents & Non-Residents)

Singapore’s personal income tax structure is progressive, meaning higher income earners pay a higher percentage of tax. This helps ensure equity while maintaining global competitiveness.

Tax Rates for Residents

Below are the resident individual income tax rates for YA 2025:

These rates apply after deducting reliefs and deductions. It’s essential to compute your chargeable income accurately.

New Rebate: 60% tax rebate (capped at S$200) applies to all resident taxpayers for YA 2025

Tax Rates for Non-Residents

For non-residents:

• Employment income is taxed at 15% or the resident rates, whichever results in a higher tax liability
• Director’s fees, consultation income, and other services are taxed at a flat 24% from the YA 2024 onwards

Income Thresholds

If your annual income exceeds S$22,000, you are legally required to file a tax return. In the following cases even if you earn more than S$6,000, you might still need to file the return:

• You receive rental income
• You have foreign income remitted to Singapore
• IRAS sends you a tax filing notification

Filing ensures compliance and opens access to tax refunds or credits due.

What You Can Do Now

Now that you have a clearer picture of how income tax works in Singapore, it’s a great time to get your documents in order, identify which reliefs or deductions apply to you, and file your return before the deadline via the IRAS myTax Portal. If you’re feeling overwhelmed or just want peace of mind, consider reaching out to a trusted tax advisor. At Water and Shark, our team of experienced tax professionals can help you navigate the process with confidence—whether you're filing as an individual, a freelancer, or a business owner. Let us take the guesswork out of taxes so you can focus on what truly matters.

FAQs

1. What is the income tax deadline in Singapore for YA 2025?
The deadline for individual income tax filing is 18 April 2025.

2. Who needs to file taxes in Singapore?
Anyone earning above S$22,000, or meeting special criteria such as rental income, must file. Even those earning less may need to file if notified by IRAS.

3. Are CPF contributions tax-deductible?
Yes, CPF contributions are among the key tax reliefs available to reduce your chargeable income.

4. What happens if I miss the tax filing deadline?
Late filing can incur penalties starting at S$200 and may escalate to court action. IRAS also charges up to 200% of undercharged tax for incorrect returns.

5. Is foreign income taxed in Singapore?
Only if it is received in or deemed received in Singapore. Otherwise, foreign-sourced income is generally not taxable.

6. What is the 60% tax rebate in YA 2025?
All resident taxpayers receive a 60% rebate capped at S$200 for YA 2025 to help offset rising costs.

7. How are directors or consultants taxed in Singapore?
From YA 2024, all director's fees and consultancy services for non-residents are taxed at a flat 24% rate.

8. What is the No-Filing Service (NFS)?
NFS allows IRAS to auto-file your return if you meet eligibility criteria, but you must verify details by the deadline.

9. Is there any capital gains tax in Singapore?
No, Singapore does not impose tax on capital gains, including profits from the sale of shares or properties.

10. Can I get professional help to file taxes in Singapore?
Yes, Water and Shark offers tailored tax advisory and filing services to help individuals and businesses stay compliant.