Dividends are distributions by a company to its shareholders, and represent returns on a shareholder’s capital, which may be paid in cash or in kind. For instance, instead of cash, a company may pay its shareholders in the form of the company’s shares.
In Singapore, dividends have different tax classifications depending on what kind of dividends they are. Generally, dividends derived in Singapore are taxable unless they are specifically exempted under the Income Tax Act. The following information is from IRAS’s website:
Dividends exempt from tax
Dividends are not taxable if they are:
- Foreign dividends received in Singapore on or after 1 Jan 2004. This excludes foreign source income received through partnerships in Singapore.
- Income distributions from unit trusts and real estate investment trusts (REIT), that are authorised under Section 286 of the Securities and Futures Act (excludes distributions out of franked dividends) on or after 1 Jan 2004.
- One-tier exempt dividends from companies under the one-tier corporate tax system.
How to report dividends
You need to declare the taxable dividends under ‘other income’, and the amount of tax deducted (please refer to your dividend vouchers/statements) under ‘Singapore tax deducted at source’ in your tax form.
However, if you hold a Singapore NRIC, the relevant companies paying the dividends will provide information on your taxable dividends to us. You need not declare the dividends (this does not apply to dividends received by joint account holders or where shares are held through nominees).
Type of dividends Need to declare? Singapore dividends from approved CPF investment Scheme agent banks as shown in the Annual Dividend Statement (ADS)
Singapore dividends from Central Depository Pte Ltd (CDP)
Singapore dividends from Supplementary Retirement Scheme (SRS)
NTUC Fair-Price dividends
Dividends from share buyback through Special Trading Counters (CTC)
Dividends from Private Companies
Any other dividends not included above
Category: Singapore Stock Market Help