This system has the potential to allow for tax avoidance practiced by individuals who derive income from abroad, gain tax exemptions via their non-resident status there, and use this income outside Singapore.
Expatriates and foreign workers in Singapore are also liable for paying income tax.
In such a case, companies can claim Foreign Tax Credit (FTC) payable on the same income.
Companies are taxed at a flat rate of 17% of their chargeable income.
[4] Foreign-sourced dividends, foreign branch profits and foreign-sourced service income remitted into Singapore on or after 1 June 2003 by a Singapore resident company will be tax exempt if:[5]