Income Tax Act - Singapore Statutes Online

Withholding of tax in respect of interest paid to non-resident persons

45.—(1) Where a person is liable to pay to another person not known to him to be resident in Singapore any interest which is chargeable to tax under this Act, the person paying the interest shall —

(a)

deduct therefrom tax —

(i)	where the person to be paid is an individual or a Hindu joint family, at the rate of 20%;
(ii)	where the person to be paid is any other person, at the rate of 18%; or [Act 27/2009, wef Y/A 2010 & Sub Ys/A:2009-ACT-27]
(iii)	where section 43(3) or (3A) is applicable to the person to be paid, at the rate specified in that provision,

on every dollar of the interest; and

(b)

immediately give notice of the deduction of tax in writing and pay to the Comptroller the amount so deducted,

and every such amount deducted shall be a debt due from him to the Government and shall be recoverable in the manner provided by section 89.

[37/75; 31/86; 1/90; 20/91; 28/92; 26/93; 28/96; 24/2001; 37/2002; 49/2004; 53/2007]

(1A) Notwithstanding subsection (1), tax shall be deducted at the rate of 20% on every payment (other than payment subject to tax at the rate specified in section 43(3) or (3A)) made on or after 1st January 2007 which would be assessable on the person receiving the payment for the year of assessment 2007.

[53/2007]

(2) The Comptroller may —

(a)

if he thinks fit, allow any bank or financial institution to give notice of the deduction of tax and make payment of the amount so deducted within such other period and subject to such conditions as the Comptroller may determine;

(b)

by notice in writing require any person who pays such interest to deduct and account for tax at a higher or lower rate than 20% or 18% or the rate specified in section 43(3) or (3A), as the case may be, on every dollar of such interest or permit such interest to be paid without deduction of tax.

[Act 27/2009, wef Y/A 2010 & Sub Ys/A:2009-ACT-27]

[1/90; 20/91; 28/92; 26/93; 28/96; 24/2001; 37/2002; 49/2004; 53/2007]

(3) Where a person fails to make a deduction of tax which he is required to make under subsection (1) any amount which he fails to deduct shall be a debt due from him to the Government and shall be recoverable as such.

(4) If the amount of tax which is required to be deducted under subsection (1) is not paid to the Comptroller —

(a)	by the 15th day of the month following the month in which the interest from which the tax is to be deducted is paid, a sum equal to 5% of such amount of tax shall be payable; and
(b)	within 30 days after the time specified in paragraph (a), an additional penalty of 1% of such amount of tax shall be payable for each completed month that the tax remains unpaid, but the total additional penalty under this paragraph shall not exceed 15% of the amount of tax outstanding. [26/93; 21/2003]

(5) Without prejudice to any other provision of this Act, if any person after deducting the tax required to be deducted under subsection (1) fails to give notice of such deduction to the Comptroller by the time specified in subsection (4)(a), he shall be guilty of an offence and shall on conviction pay a penalty equal to 3 times the amount of tax so deducted and shall also be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.

[26/93; 21/2003]

(6) Where an individual has been convicted for 3 or more offences under this section the imprisonment he shall be liable to shall be not less than 6 months.

(7) The Comptroller may —

(a)	compound an offence under subsection (5) and may before judgment stay or compound any proceedings thereunder; and
(b)	for any good cause remit the whole or any part of the penalty payable under subsection (4).

(8) For the purposes of this section —

(a)	the manager or principal officer of a company shall be answerable for doing all such acts, matters and things as are required to be done by the company under this section; and
(b)	interest shall be deemed to have been paid by a person to another person although it is not actually paid over to the other person but is reinvested, accumulated, capitalised, carried to any reserve or credited to any account however designated, or otherwise dealt with on behalf of the other person.

(9) This section shall not apply to —

(a)	any interest derived from any qualifying debt securities issued during the period from 27th February 1999 to 31st December 2013, subject to such conditions as the Minister may impose; [34/2008 wef 16/12/2008]
(b)	any interest derived from any qualifying project debt securities issued during the period from 1st November 2006 to 31st December 2011, subject to such conditions as the Minister may impose. [34/2008 wef 16/12/2008] [53/2007]

(10) In this section, “qualifying debt securities” and “qualifying project debt securities” have the same meanings as in section 13(16).

[53/2007]

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