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Tax Rates and Exemptions for General Partnerships

Taxation Guide General Partnerships

Definition and Filing
Tax Rates and Deductions
Tax Exemption Schemes

Definition and Filing

As a partnership is not an entity in law, the partnership does not pay income tax on the income earned by the partnership. Instead, each partner will be taxed on his or its share of the income from the partnership.

  • Where the partner is an individual, his share of income from the partnership will be taxed based on his personal income tax rate. See below
  • Where a partner is a company, its share of income from the partnership will be taxed at the tax rate for companies. While the partnership does not pay tax, it still has to file an annual income tax return to show all income earned by the partnership and deductions claimed for expenses incurred in carrying on the partnership business. See tax rates for companies

Filing

The partnership should decide on its accounting period when it first starts business. The accounting period is the period of trade for which the business calculates profits or losses.

A 4-line statement summary from the statement of accounts needs to show the

  • Revenue
  • Gross Profit
  • Allowable Business Expenses
  • Adjusted Profit/Loss

To arrive at the Divisible Profit of the business which is then allocatedto the partners, the below figures need to be deducted from the Adjusted Profit/Loss

  • partners' salaries
  • allowances
  • bonuses
  • CPF contributions
  • interest on capital
  • any other expenses paid on behalf of all the partners.

Tax Rates and Deductions

The non-resident foreign individual partner staying employed below 60 days in a calendar year* is not taxed in Singapore.

If staying employed in Singapore for 61 to 182 days in a calendar year* partner is

  • taxed on all income earned in Singapore at a flat rate of 15% or the progressive resident rates depending on which results in a higher tax.
  • not entitled to tax reliefs.
  • if receiving Director's fees and other income such as rent earned in or derived from Singapore will be taxed at the prevailing rate of 20%.
  • required to fill in Form M (Income Tax Return for Non-Residents)

If staying employed in Singapore for 183 days in a calendar year* or at least 183 days for a continuous period over two years partner is

  • taxed at progressive resident rates.
  • may claim tax reliefs.

* The number of days in Singapore include weekends and public holidays.

Check if individual partner qualifies for tax benefits under the NOR scheme, which is specifically targeted at individuals who are not ordinarily resident in Singapore.

What is taxable

  • Annuity 
  • Business income 
  • Charge 
  • Dividend 
  • Employment income 
  • Estate/Trust income 
  • Gains from sales of property
  • Income received from outside Singapore 
  • Interest 
  • Pension 
  • Rent & Net Annual Value (NAV) from property 
  • Royalty 
  • Winnings (Toto, 4D...) 
  • Withdrawal from Supplementary Retirement Scheme (SRS)

For definitions see IRAS

Deducations

  • Business expenses 
  • Productivity and Innovation Credit 
  • Employment expenses 
  • Rental and Net Annual Value (NAV) Expenses 
  • Donations 
  • Reliefs 
  • Parenthood tax rebate 
  • One-off personal tax rebate (for YA 2009) 
  • Highlights of Enhanced Marriage & Parenthood Tax Measures 

For definitions see IRAS

Tax Exemption Schemes

See NOR for individual partners and Company Tax Exemptions Schemes