Is Dividend Taxable in Singapore? A Complete Guide

Singapore does not have a dividend tax for individuals. Dividends are paid out of a company's after-tax profits under the one-tier corporate tax system, so once the company has paid its 17% corporate tax, shareholders don't pay tax again on the same money when it's distributed to them. A minority of dividends fall outside that protection and are taxed as ordinary income instead.

Earning dividends is a popular way to draw income from a Singapore company, and the tax treatment is a big part of why. But "dividends aren't taxed" isn't quite the full rule; it depends on the source of the dividend and how it reaches you. Get that wrong and you can under-report income to IRAS without realising it.

This guide walks through which dividends are tax-free, which ones aren't, how to declare the taxable ones correctly, and a full worked example so the numbers are concrete rather than abstract.

Are Dividends Taxable in Singapore?

Most dividends paid to shareholders, whether interim or final, are exempt from tax in Singapore. No further tax is payable on them once they reach you.

This is because Singapore uses a one-tier corporate tax system: tax is paid once, at the company level, before profits are distributed as dividends. Here's how that plays out for a company with three equal shareholders:

• The company makes a profit of SGD 100,000 and pays 17% corporate tax, which is SGD 17,000. That leaves SGD 83,000 in after-tax profit.
• The company distributes all SGD 83,000 as dividends, split evenly three ways. Each shareholder receives roughly SGD 27,667.
• None of the three shareholders pays any further tax on that SGD 27,667, because the company has already paid tax on the underlying profit.

Dividends are also not subject to Goods and Services Tax (GST) in Singapore, as they do not involve the provision of goods or services.

What Are the Non-Taxable Dividends in Singapore?

According to the Inland Revenue Authority of Singapore (IRAS), the following dividends received by resident individuals are generally tax-exempt:

• Dividends from Singapore resident companies, including companies listed on the Singapore Exchange (evidenced by your Central Depository statement), and private resident companies, but excluding dividends from co-operatives
• Dividends from foreign companies, except those received through a partnership in Singapore
• Income distributions from Real Estate Investment Trusts (REITs), except those received through a partnership in Singapore or in connection with a trade, business, or profession involving REITs
• Distributions from unit trusts in Singapore, and share buybacks through Special Trading Counters (STC)

What Types of Dividends Are Taxable?

Dividends from the following sources are taxable income, meaning you do have to pay tax on them:

• Dividends from co-operatives, such as those registered under the MCCY Registry of Co-operative Societies or NTUC Healthcare Co-operative Ltd
• Foreign-sourced dividends received through a partnership in Singapore, though some of these may qualify for exemption under the Foreign-Sourced Income scheme (more below)
• Income distributions from REITs received through a partnership, or connected to a trade, business, or profession you carry on involving REITs

Are Foreign-Sourced Dividends Taxable?

Foreign-sourced dividends received by companies in Singapore are generally taxable, but the Foreign-Sourced Income Exemption (FSIE) scheme under Section 13(8) of the Income Tax Act can exempt them if the three qualifying conditions under Section 13(9) are all met:

1. Subject-to-tax condition: the income has already been taxed in the foreign jurisdiction from which it came.
2. Foreign headline tax rate condition: the jurisdiction's headline corporate tax rate was at least 15% at the time the dividend was received in Singapore. This is about the jurisdiction's statutory rate, not the specific rate your company actually paid.
3. Beneficial condition: the Comptroller of Income Tax is satisfied that the exemption benefits the Singapore resident receiving the income.

All three need to be satisfied, not just the headline rate condition. Because the analysis depends on the specific foreign jurisdiction and the nature of the income, it's worth reviewing with a tax advisor rather than assuming the exemption applies.

Are Dividends or Salary Better in Singapore?

For business owners deciding how to pay themselves, dividends and salary trade off in different ways.

Dividends aren't subject to personal income tax, but they also aren't deductible as a business expense, so the company pays full corporate tax on the profit before it's distributed. Salary is deductible for the company, which lowers its taxable profit, but it's subject to progressive personal income tax in your hands and requires CPF contributions from both you and the company.

Most business owners end up using a mix of both, weighted according to their own income needs and the company's cash position. Since the right balance depends on your specific numbers, it's worth running the comparison with a tax advisor rather than defaulting to one or the other.

How to Declare Dividends

Non-taxable dividends don't need to be declared. Taxable dividends must be reported in the year they're declared payable to shareholders, under the "Other Income" section of your Income Tax Return, unless the company has indicated on the dividend voucher that it will pass the details to IRAS directly.

To file via myTax Portal:

1. Prepare your Singpass or Singpass Foreign User Account (SFA), Form IR8A if applicable, and the paying company's registration number.
2. Sign in with Singpass or SFA.
3. Select "Individuals," then "File Income Tax Return”.
4. Check the pre-filled information.
5. Declare the taxable dividends under "Other Income".
6. Update any tax deductions and reliefs that apply to you.
7. Submit and keep the acknowledgement receipt.

Tax Incentives That Affect How Much a Company Can Distribute

These don't change whether a dividend itself is taxed. They reduce the company's tax bill first, which leaves more after-tax profit available to distribute as dividends in the first place:

• Start-Up Tax Exemption (SUTE): 75% exemption on the first SGD 100,000 of normal chargeable income, plus 50% on the next SGD 100,000, for a company's first 3 Years of Assessment. That's up to SGD 125,000 of income exempted, which saves up to SGD 21,250 in tax at the 17% rate.
• Partial Tax Exemption (PTE): 75% exemption on the first SGD 10,000 of normal chargeable income, plus 50% on the next SGD 190,000, for companies no longer eligible for SUTE. That's up to SGD 102,500 of income exempted.
• Foreign-Sourced Income Exemption: covered above; can exempt qualifying foreign dividends from Singapore tax entirely.

Final Thoughts

Whether a dividend is taxable in Singapore comes down to where it's from and how it reaches you, not a blanket rule either way. Dividends from Singapore resident companies, most foreign companies, and most REITs are tax-exempt in the hands of individual shareholders. Dividends from co-operatives, and foreign or REIT income routed through a partnership or business activity, generally aren't.

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