Calculating withholding tax

Example

If a foreigner or Singapore Permanent Resident (SPR) has $300,000 in his SRS account by the retirement age of 62 and decides to withdraw the whole amount, he will be taxed on half of the amount withdrawn.

*Effective 1 Jul 2014, the concessionary withholding tax rate of 15% will apply if the following conditions are met:

1. Cumulative amount withdrawn by the SRS account holder in the calendar year does not exceed $200,000
2. The SRS account holder does not have any other income besides the SRS withdrawal(s) during the calendar year when the withdrawal(s) are made.

To enjoy this concession, the SRS account holder must declare that he fulfils the two conditions above to his SRS Operators.

Withholding tax is not the final tax

No. If the foreigner or SPR is a Singapore tax resident, the actual tax payable on the SRS withdrawal will be based on the progressive resident rates.

For a non-resident, the actual tax payable on the SRS withdrawal will be 15% or the progressive resident rates, whichever is higher.

Claiming refunds on withholding tax

Tax withheld on the withdrawal is a tax credit that will be used to offset your actual tax liability. Any unused tax credit will be refunded to you.

In the example, assuming the actual tax rate applicable to the SRS withdrawal is finally determined to be 15% and you have no other tax liability, the refund you will receive is calculated as follows:

For tax refund claims, please provide IRAS with details of your name, tax reference number and forwarding address.