SINGAPORE

Source: IMF, International Financial Statistics, June 2024.

• The Singapore central bank is the Monetary Authority of Singapore (MAS -www.mas.gov.sg).

Bank supervision

• Singapore banks are supervised by the MAS.

• Lifting fees, most typically per item-based charges and/or subscription fees, are applied on payments between resident and non-resident bank accounts.

(Please note that the  below is all based on what is available in Singapore but does not reflect BNPP's capabilities.)

• Credit transfers are used by companies to pay salaries and suppliers, and for treasury payments.
• Credit transfers are available as both paper-based and electronic payment instruments.
• High-value and urgent domestic SGD-denominated credit transfers can be settled in real time via MEPS+.
• Low-value, non-urgent and high-volume credit transfers can be settled via the IBG on a same day basis or up to three business days.
• Low-value credit transfers can also be settled via FAST (SGD 200,000 or less). FAST can be used 24 hours a day, seven days a week. Thirty banks and seven non-financial institutions participate in FAST.
• Low-value credit transfers can also be made via PayNow (SGD 200,000 or less) on a near real-time basis. Payments are settled via FAST. PayNow has adopted the Singapore Quick Response Code (SGQR) specifications, enabling businesses to collect payments via the service through QR codes. There are nine bank participants in in PayNow, and three non-bank financial institutions. There are twenty-one bank participants in PayNow, and five non-bank institutions. Over 80% of individuals and businesses are registered on PayNow.
• PayNow Corporate enables entities such as businesses to pay and receive SGD funds instantly with the linking of the Unique Entity Number (UEN) to their Singapore bank account. PayNow corporate registrations totalled 240,000 by end 2020.
• As of February 2021, eligible non-bank financial institutions have had direct access to FAST and PayNow, enabling users of e-wallets to make real-time transfers between bank accounts and e-wallets as well as across different e-wallets.
• Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
• In 2020, the volume and value of credit transfers increased 24.4% and 10.8% respectively, to 255 million transactions, with a value of SGD 664.3 billion.

In 2021, the Association of Banks in Singapore (ABS) launched the eGIRO service that fully digitises the current paper-based GIRO process.

• The cheque is a popular cashless payment instrument, used by both consumers and companies.
• Cheques are truncated into electronic items before being settled on a next-day basis.
• Singapore has two cheque truncation systems: one for SGD-denominated cheques (SGDCTS), the other for USD-denominated cheques (USDCTS).
• Final settlement of SGD and USD-denominated cheques takes place via MEPS+.
• In July 2023, MAS announced that all corporate cheques will be eliminated by end-2025 while individuals will still be able to use cheques for a period after 2025.

• Card payments are increasingly popular, especially for retail transactions. There were 7.0 million credit cards in circulation at the end of December 2023.
• Contactless payment cards are issued and their use increasing.
• Visa-branded payment cards are the most widely issued, although MasterCard, American Express and Diners Club credit cards are also available.
• All card payments are processed via NETS on a same-day basis.
• All cards issued have EMV chips.
• In 2023, the volume of card payments grew 21.6% year on year to 1.98 million transactions. The total value also grew 13.7% to SGD 1.41 billion.

• There are three main ATM networks in Singapore: the proprietary DBS-POSB network, the atm5 network, which is used by six foreign banks, and the NETS network, which is operated by MasterCard and used by the United Overseas Bank and the Overseas-Chinese Banking Corp. The networks are not interoperable. 
• All payments are processed via NETS on a same-day basis.
• All ATMs and POS terminals are EMV-compliant.
• The MEPS operated Shared ATM Network switch connects all ATMs in Singapore.

• The dominant electronic wallet schemes are the NETS operated CashCard and FlashPay schemes, as well as an independent EZ-Link card.
• Single and multi-purpose stored-value cards are both available.
• Card-based e-money transactions fell 33.8% and 36.7% in volume and value terms respectively in 2020, on 2019 figures.
• Mobile wallets are widely accepted throughout Singapore due to the SGQR code. Popular e-payment methods include GrabPay, AliPay Nets and PayLah.
• E-money payments are settled on a next-day basis via NETS.
• In 2023, E-money transactions saw a slight decline of 6.8% in terms of volume to 2.22 million transactions compared to the previous year. The total value grew by 11.5% to SGD 2.4 billion in the same period.

• The professionals in the BNP Paribas Global Trade Solutions (GTS) team in Singapore offer both local and regional support across Asia Pacific. GTS in Singapore provides a wide range of product offerings from traditional trade products to supply chain management solutions complemented by excellent service delivery by ISO-certified middle and back offices. With strong product expertise and in-depth knowledge of local market requirements, BNP Paribas has become a leading trade finance bank in the region.

• Singapore has 27 implemented free trade agreements in place with more than 30 trading partners, including USA, China, Australia, the GCC, the TPSEP, EFTA and Japan.
• Singapore is a signatory of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP came into force in December 2018.
• Singapore is a signatory of the Regional Comprehensive Economic Partnership (RECP). The country ratified the agreement in April 2021.
• ASEAN has signed free trade agreements (FTAs) with Australia, China, Japan, Hong Kong, India, New Zealand and South Korea.

Source: IMF, International Financial Statistics, June 2021.

• Licences are required for reasons of national security, environmental protection and on health and safety grounds.

• Tariffs are generally not set on imports.
• Only samsoo, beer and stout products currently attract import tariffs.
• There are eight free trade zones in Singapore.

• None

• None

• Prohibited imports are available on the Singapore Customs website. Refer to 

  https://www.customs.gov.sg/businesses/importing-goods/controlled-and-pr…   

  for more information.

• Licences are required when exporting ozone depleting substances and rubber.
• Licences with quotas are required when exporting certain pine and mahogany wood products.

• None

• None

• Export credit insurance is available from the privately owned ECICS.

• Prohibited imports are available on the Singapore Customs website. Refer to 

  https://www.customs.gov.sg/businesses/exporting-goods/controlled-and-pr…    

  for more information.

• Singapore does not apply exchange controls.
• There are some restrictions on the use of SGD for non-domestic transactions.

• For accounting purposes, the adoption of Financial Reporting Standard (FRS) 39 requires companies to reflect their financial assets and liabilities at market values in their financial statements.
• The income tax treatment of financial instruments on the revenue account follows the accounting treatment under FRS 39. This has the following implications:
  • Financial instruments classified as fair value through the profit and loss account: realised and unrealised gains or losses recognised in the profit and loss account are taxable or deductible.
  • Financial instruments classified as available-for-sale: gains or losses which are recognised in the balance sheet are not taxable or deductible. At the time of de-recognition (e.g. when the assets are disposed of), the cumulative gains or losses recognised in the balance sheet that are transferred to the profit and loss account are taxable or deductible. Accordingly, impairment losses, reversal of impairment losses, and foreign exchange gains or losses that are recognised in the profit and loss account are also taxable or deductible.
  • Financial instruments classified as held-to-maturity and loans: the ‘interest income’ that is shown in the accounts and calculated using the effective interest method is taxable.
• Gains or losses reflected in the profit and loss account for financial instruments held on capital account are not taxable or deductible.

• For Singapore income tax purposes, companies can deduct interest expenses to the extent the related financing is used for income-producing purposes. An asset is considered as income producing if it is used to generate income, which is assessable to Singapore income tax.

• N/A

• A taxpayer can request an advance ruling from the IRAS on the tax consequences of a particular transaction or arrangement. 

• Capital gains are exempt from tax.

* Excluding certain literary and artistic copyright royalties, approved invention or innovation royalties.

** The withholding tax at 15% (or 10% for royalties) on the gross payment is a final tax. It applies provided that the income is not derived by the non-resident through its operations carried out in or from Singapore. Operations carried out in or from Singapore will continue to be taxed at the prevailing corporate tax rate on their chargeable income.

• There is no withholding tax on dividends paid by companies resident in Singapore.
• Interest paid to a non-resident generally is subject to a 15% withholding tax, unless the rate is reduced under a tax treaty or an exemption applies under certain domestic concessions (broadly applicable to interest received on deposits held with approved banks or licensed finance companies in Singapore, and interest from debt securities not derived from a partnership in Singapore, nor from carrying on a trade in debt securities). The 15% withholding tax is a final tax and applies to interest (i) derived by the non-resident from a business carried on outside Singapore, or (ii) not effectively connected to a permanent establishment (PE) in Singapore. Any other interest paid to a non-resident company that does not qualify for the final rate or an exemption (including interest derived from a business in Singapore or effectively paid to non-resident individuals that does not qualify for the 15% final rate or a domestic concession) is taxed at 22%, Interest paid to a Singapore resident is not subject to withholding tax.
• Royalties paid to a non-resident are subject to a 10% withholding tax, unless the rate is reduced under a tax treaty. The 10% withholding tax is a final tax and applies to royalties (i) derived by a non-resident from a business carried on outside Singapore, or (ii) not effectively connected to a PE in Singapore. Any other royalties paid to non-resident companies that do not qualify for the final rate are taxed at the prevailing corporate tax rate (17% for 2021). Payments to non-resident individuals are subject to withholding tax of the lower of 22% on net income or 10% on the gross royalties. Royalties paid to a Singapore resident are not subject to withholding tax.
• Payments to non-residents (other than individuals) for technical services rendered in Singapore are subject to a 17% withholding tax, unless the rate is reduced under a tax treaty. This includes fees for the rendering of assistance or services in connection with the application or use of scientific, technical, industrial, or commercial knowledge or information; or for management or assistance in the management of a trade, business, or profession, unless the services are rendered entirely outside Singapore, and not performed through a business carried on in Singapore or a PE in Singapore. For non-resident individuals, withholding tax applies at 15% on the gross income, unless the individual opts to be taxed at 22% on the net income. Fees for technical services paid to a Singapore resident are not subject to withholding tax.

• Singapore has concluded over 80 comprehensive tax treaties.
• The OECD MLI entered into force in Singapore on 1 April 2019.

• The deductibility of interest expense generally depends on the specific purpose of the loan. Interest is deductible where the loan is obtained for revenue purposes (i.e. to finance the purchase of inventory). Interest incurred on a loan to finance the purchase of a capital asset is deductible to the extent that the capital asset is used to generate income that is subject to Singapore income tax. The interest may be apportioned where loans are obtained for both income-producing and non-income producing purposes.

• Mandatory transfer pricing documentation for companies is imposed as from 2019 year of assessment, subject to safe harbor provisions.
• Penalties may be imposed for noncompliance.
• Transfer pricing adjustments made by the IRAS may be subject to an additional surcharge of 5%.
• Transfer pricing guidelines cover the application of the arm’s length principle, documentation requirements, advance pricing agreements and requests to invoke the mutual agreement procedure under Singapore’s tax treaties.
• The IRAS also has issued transfer pricing guidelines for related party loans and services.
• Singapore has introduced country-by-country (CbC) reporting requirements.

• Stamp duty applies only to financial instruments (written or electronic form) relating to stock and shares and immovable property. These include the sale of a mortgage of immovable property and shares and a lease of immovable property.  An ad valorem stamp duty is chargeable on a lease or agreement for a lease of any immovable property with annual rent exceeding SGD 1,000. Leases with annual rent not exceeding SGD 1,000 are exempt.
• Buyer’s stamp duty (BSD) of up to 4% is payable on acquisitions of residential properties, and up to 3% is payable on acquisitions of non-residential properties. Additional buyers stamp duty (ABSD) is payable by certain groups that purchase or acquire residential property (including residential land). The additional buyers stamp duty is 5% to 30%, depending on the category of the buyer and is computed on the higher of the purchase price or market value of the property.
• Seller’s stamp duty (SSD) of up to 15% and 12% applies to industrial and residential property depending on the holding period and date of acquisition.
• The buyer’s stamp duty on the acquisition of stock and shares is 0.2% of the market value or value of consideration, whichever is higher. The acquisition of equity interests in a company that primarily owns (directly or indirectly) residential property in Singapore may attract additional conveyance duties (BSD and ABSD for buyers and SSD for sellers).
• The transfer of scripless shares listed on the Singapore stock exchange, however, is not subject to stamp duty. Stamp duty relief is available in a number of cases, subject to conditions.

• Singapore has no specific tax rules that apply to cash pooling arrangements.

• Singapore does not have specific taxes applying to financial transactions and banking services, including loans, money transfers, letters of credit, and foreign exchange.

All tax information supplied by Deloitte Touche Tohmatsu and Deloitte Highlight 2021 (www.deloitte.com).