I am glad that the Singapore government makes income tax law so simple, and easy to understand.
The Singapore government is rich enough. It is rich because of wise investments throughout the world. It is rich because of the fiscal policies that encourage saving and investment on a governmental level.
That is why the government is encouraging people to save on a personal level, and invest for growth through the tax law.
Capital gain is tax free. Dividend from stocks and bonds, and interest earned on saving account are tax free.
Annuity income is tax free too, unless it falls into the 3 categories where the income tax rules apply.
The income tax rate for residents is very low compared to many countries with pension scheme.
The best thing for freelancer is that income earned from overseas is tax free too. This single law is responsible for many rich people setting up residence here.
They come from regional countries, and they do not have to pay a single cent in income tax because they get their income from overseas.
If we make $40,000 a year, we will pay about $400 in income tax. The reason is that the first $20,000 is tax free. That is assuming that you do not have any tax relief and there is no tax rebate.
In many cases, after applying the tax reliefs, there is no need to pay income tax. The tax relief for parenthood is very generous.
Since annuity income is tax free, we can buy insurance policies that are convertible to annuity when we retire.
In fact, some insurance companies give a 5% increment in cash value for converting a life insurance policy to annuity.
This is good for those long time savers who use insurance policies as their saving tools.
If they have $50,000 in cash value, the insurance company will add $2,500 to the money, so the total value of annuity starts with $52,500.
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How I wish I would be residing in your country, the Singapore. Your country is rich; that is why, there are a lot of free taxes which the Singaporean may avail of. Annuity investment for those senior citizens poses a very beneficial to those persons that when they retire they may get the entire investment they have made without paying a single penny on their pocket. Singapore's government is well-run by the honest people in their country.
Hopefully that the future generation does not get too complacent, and spend all the money.
If the government starts to spoonfeed people, it will happen.
As it is, the current policy is to teach people to fish, and tell them that nobody is going to feed them if they do not want to work.
You may be able to claim tax deductions on employment expenses 'wholly and exclusively' incurred in earning your income. This means you used your own money to pay for expenses necessary to your employment such as travel expense, entertainment expense, subscriptions,
Any income arising from sources outside Singapore and received in Singapore on or after 1 Jan 2004 by an individual (other than partners of a partnership) is exempt from income tax.
For a person who is a tax resident and a partner of a partnership, any income derived on or before 21 Jan 2009 from any sources outside Singapore and received in Singapore during the period 22 Jan 2009 to 21 Jan 2010 is exempt from income tax.