Withholding Tax in Singapore: What SME Payers Must Know

Singapore businesses that make royalty, interest, or service fee payments to non-resident companies or individuals are required by law to withhold a percentage of each payment and remit it to IRAS on the payee's behalf.

1. File and pay by the 15th of the second month — after making a specified payment (royalties, interest, technical service fees, management fees) to a non-resident, the payer must deduct WHT and submit the S45 form together with payment to IRAS by the 15th of the second month from the date of payment. Late payment attracts a 5% penalty surcharge.
2. Apply the correct WHT rate — common rates are: royalties 10%, interest 15%, technical service and management fees 17% for non-resident companies. Rates differ for non-resident individuals and public entertainers.

If the non-resident payee has a Permanent Establishment (PE) in Singapore, income is assessed as business income — WHT does not apply, but confirm PE status in writing before omitting the withholding.

Tip: Use IRAS's WHT Applicability Calculator at mytax.iras.gov.sg before each payment to confirm whether withholding applies and at what rate, avoiding costly under-withholding penalties.

Source: https://www.iras.gov.sg/taxes/withholding-tax/basics-of-withholding-tax/overview-of-withholding-tax-(WHT)