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 22%;
[Act 2 of 2016 wef 01/01/2016]
(ii)where the person to be paid is any other person, at the rate of 17%; or
(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 and pay to the Comptroller the amount so deducted,
[Act 2 of 2016 wef 01/07/2016]
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; 27/2009]
(1A)  Notwithstanding subsection (1), tax shall be deducted at the rate of 18% 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 2009 which would be assessable on the person receiving the payment for the year of assessment 2009.
[27/2009]
(1B)  The notice under subsection (1)(b) must be given using the electronic service, except that the Comptroller may in any particular case or class of cases permit the notice to be given in any other manner.
[Act 2 of 2016 wef 01/07/2016]
(1C)  The Minister may, by rules made under section 7, substitute the rate in subsection (1)(a)(i), (ii) or (iii) with a higher or lower rate (including 0%) for any person or class of persons that is or are subject to that subsection, and subsection (1) applies to that person or class of persons accordingly.
[Act 34 of 2016 wef 29/12/2016]
(1D)  The rules mentioned in subsection (1C) may —
(a)provide that the substitute rate applies only if such conditions as may be specified in the rules are satisfied; and
(b)prescribe different substitute rates for different persons or classes of persons.
[Act 34 of 2016 wef 29/12/2016]
(2)  The Comptroller may —
(a)if he thinks fit, allow any person or class of persons 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; and
[Act 34 of 2016 wef 29/12/2016]
(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 the rate in subsection (1)(a)(i), (ii) or (iii), or the rate prescribed by rules mentioned in subsection (1C) in substitution for that rate, as the case may be, on every dollar of such interest or permit such interest to be paid without deduction of tax.
[1/90; 20/91; 28/92; 26/93; 28/96; 24/2001; 37/2002; 49/2004; 53/2007; 27/2009]
[Act 2 of 2016 wef 01/01/2016]
[Act 34 of 2016 wef 29/12/2016]
(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 second month following the month in which the interest from which the tax is to be deducted is paid, or such other date as may be allowed under subsection (2)(a), a sum equal to 5% of such amount of tax shall be payable; and
[Act 34 of 2016 wef 29/12/2016]
(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; 29/2012]
(5)  Without prejudice to any other provision of this Act, if any person after deducting any tax under subsection (1) fails to give notice of such deduction to the Comptroller in the manner referred to in subsection (1B) and 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.
[Act 39 of 2017 wef 26/10/2017]
[26/93; 21/2003]
[Act 2 of 2016 wef 01/07/2016]
(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 2018 (both dates inclusive), subject to such conditions as the Minister may impose;
[Act 37 of 2014 wef 27/11/2014]
(b)any interest derived from any qualifying project debt securities issued during the period from 1 November 2006 to 31 December 2022 (both dates inclusive), subject to such conditions as the Minister may impose;
[53/2007; 34/2008; 22/2011; 19/2013]
[Act 37 of 2014 wef 21/02/2014]
[Act 37 of 2014 wef 27/11/2014]
[Act 45 of 2018 wef 01/04/2017]
(c)any interest liable to be paid on or after 21st February 2014 by a person to a branch in Singapore of a company incorporated outside Singapore and not known to him to be resident in Singapore.
[Act 37 of 2014 wef 21/02/2014]
(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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Last updated 23 Apr 2024
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