In Singapore, individual income tax forms part of two different sources income tax. The taxation system works on the basis that only income earned in Singapore are taxable. Residential status plays a big role in pay income tax, allowing in some cases the taxpayer to only pay it proportionate to the number of days he or she spent in Singapore, and only on the portion earned directly there.

These are the Tax rates for Singapore individual residents:

Chargeable Annual Income Bracket Rate
For the first S$20,000 0%
S$20,000 - S$30,000 3.5%
S$30,000 - S$40,000 5.5%
S$40,000 - S$80,000 8.5%
S$80,000 - S$160,000 14%
S$160,000 - S$320,000 17%
S$320,000 and above 20%

* Singapore Government's has experienced a gradual reduction of nominal individual tax rates since the 80s, a trend similarly observed in other countries. A reduction trend that has sinking even further since 2003.

These are the Tax rates for Singapore individual non-residents:

Year of Assessment Rate
1997 to 2000 26%
2001 25.5%
2002 24.5%
2003 22%
2004 onwards 20%

* Non-residents had been taxed at a flat rate of 15% since late 2008.

According to "en.wikipedia.org":

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Resident taxpayers also enjoy various forms of tax reliefs which are claimable as tax deductions:

* Earned income relief: Relief automatically accorded to each taxpayer up to a maximum of S$1,000 for taxpayers below the age of 55. Taxpayers above this age as well as handicapped persons enjoy higher tax relief.

* Wife/Handicapped Spouse Relief: Claimable for male taxpayers living with and/or supporting their spouses, up to a maximum of S$2,000. Up to S$3,500 may be claimable for a taxpayer who's spouse/ex-spouse is handicapped.

* Child Relief: There are three types of relief, namely the Qualifying Child Relief, which is claimable up to S$4,000, Handicapped Child Relief, up to S$5,500, and Enhanced Child Relief, claimable up to S$15,000 for female taxpayers filing their tax returns separately, are living separately from their husbands, are divorced, or are widowed. With effect from YA2005, the Enhanced Child Relief is replaced by the Working Mother’s Child Relief, which has a maximum claimable amount of S$25,000.

* Relief for Delivery & Hospitalisation Expenses for 4th Child: Aimed towards encouraging larger families, tax relief of up to S$3,000 may be claimable, so long that the expenses were incurred on or before 1 August 2004.

* Parents/Handicapped Parents/Grandparent Caregiver Relief: Taxpayers who are supporting their parents, and who meet all specific criteria may claim up to S$5,000, or up to S$8,000 should the parent be handicapped. The grandparent caregiver relief comes into effect from YA2005, claimable for up to S$3,000.

* Handicapped Brothers or Sisters Relief: Taxpayers supporting siblings who are handicapped may claim up to S$3,500 for each dependent.
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Source(s):
http://en.wikipedia.org/wiki/Individual_income_tax_in_Singapore

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