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As a partnership is not an entity in law, the partnership does not pay income tax on the income earned by the partnership. Instead, each partner will be taxed on his or its share of the income from the partnership.
Where the partner is an individual, his share of income from the partnership will be taxed based on his personal income tax rate. See below
Where a partner is a company, its share of income from the partnership will be taxed at the tax rate for companies. While the partnership does not pay tax, it still has to file an annual income tax return to show all income earned by the partnership and deductions claimed for expenses incurred in carrying on the partnership business. See tax rates for companies
Tax Rates and Deductions
Tax Rates and Deductions
The non-resident foreign individual partner staying employed below 60 days in a calendar year* is not taxed in Singapore.
If staying employed in Singapore for 61 to 182 days in a calendar year* partner is
taxed on all income earned in Singapore at a flat rate of 15% or the progressive resident rates depending on which results in a higher tax.
not entitled to tax reliefs.
if receiving Director's fees and other income such as rent earned in or derived from Singapore will be taxed at the prevailing rate of 20%.
required to fill in Form M (Income Tax Return for Non-Residents)
If staying employed in Singapore for 183 days in a calendar year* or at least 183 days for a continuous period over two years partner is
taxed at progressive resident rates.
may claim tax reliefs.
* The number of days in Singapore include weekends and public holidays.
Check if individual partner qualifies for tax benefits under the NOR scheme, which is specifically targeted at individuals who are not ordinarily resident in Singapore.
What is taxable
What is taxable
Annuity
Business income
Charge
Dividend
Employment income
Estate/Trust income
Gains from sales of property
Income received from outside Singapore
Interest
Pension
Rent & Net Annual Value (NAV) from property
Royalty
Winnings (Toto, 4D...)
Withdrawal from Supplementary Retirement Scheme (SRS)
Deducations
Deducations
Business expenses
Productivity and Innovation Credit
Employment expenses
Rental and Net Annual Value (NAV) Expenses
Donations
Reliefs
Parenthood tax rebate
One-off personal tax rebate (for YA 2009)
Highlights of Enhanced Marriage & Parenthood Tax Measures
Filing
Filing
The partnership should decide on its accounting period when it first starts business. The accounting period is the period of trade for which the business calculates profits or losses.
A 4-line statement summary from the statement of accounts needs to show the
Revenue
Gross Profit
Allowable Business Expenses
Adjusted Profit/Loss
To arrive at the Divisible Profit of the business which is then allocatedto the partners, the below figures need to be deducted from the Adjusted Profit/Loss
partners' salaries
allowances
bonuses
CPF contributions
interest on capital
any other expenses paid on behalf of all the partners.
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