Tax on SG Salary? 5 Keys to the Double Tax Agreement

At a Glance

Residency Status: You are considered a tax resident in Singapore if you stay for 183 days or more.

Avoid Double Taxation: Thanks to the agreement between Korea and Singapore, you don't have to pay tax twice on the same income.

Investment Benefits: Capital gains from stock sales are effectively 0% for Singapore residents, offering a significant advantage.

When you first move to Singapore, one of the biggest concerns is taxes. You might wonder, "I still have a house and family in Korea—do I need to report my Singapore income to the Korean National Tax Service?" or "Do I have to pay tax in Singapore on dividends from Korean stocks?"

I remember losing sleep over these complex tax issues when I first arrived. But don't worry! We have a strong shield called the "Korea-Singapore Double Taxation Avoidance Agreement." Including the latest updates for 2025 and 2026, I’ve summarized the essential information to help you protect your hard-earned assets.

1. How to Determine if You Are a 'Singapore Tax Resident'

The first thing you need to check is your "tax residency." Simply having a visa isn't enough. According to the agreement, residency is usually determined by applying the following criteria in order:

The 183-Day Rule: If you stay or work in Singapore for 183 days or more in a calendar year (Jan 1 – Dec 31), you are classified as a Singapore tax resident.
Permanent Home: If you have homes in both Korea and Singapore, your residency is determined by where your family lives or where your economic interests are closer (Center of Vital Interests).
Habitual Abode: If the above criteria are still ambiguous, the country where you spend more time is used as the standard.

Most EP (Employment Pass) holders are recognized as Singapore tax residents because they earn their living here, meaning their Singapore employment income is usually exempt from Korean taxation. However, if you have family or real estate income in Korea, "dual residency" issues may arise, so stay alert.

2. Saving on Investment Taxes with Treaty Rates

This agreement shines when you live in Singapore and invest in Korean stocks, or vice versa. Specifically, for dividend and interest income, "treaty rates" (limited tax rates) apply, reducing your tax burden.

Income Type	Standard Rate	Treaty Rate	Remarks
Dividend Income	20%	10% – 15%	10% if shareholding is ≥ 25%
Interest Income	15% – 20%	10%	Applied between Korea & SG
Royalties	10% – 20%	5%	Significantly reduced in 2019
Capital Gains (Stocks)	Varies	0% (Resident State)	No capital gains tax in SG

The Capital Gains on Stocks is particularly noteworthy. Under the agreement, profits from selling stocks can only be taxed in the country where the seller resides. Since Singapore does not tax individuals on capital gains (0%), Singapore residents can enjoy the massive benefit of not paying capital gains tax in Korea even when selling Korean stocks.

3. 2025 Special Rebates and 2026 Changes

The Singapore government often provides benefits to residents through its annual budget. There is good news for 2025, and reporting procedures for the Korean National Tax Service will become more detailed starting in 2026.

2025 Personal Income Tax Rebate: For the Year of Assessment (YA) 2025, all tax residents will receive a 60% rebate on their income tax, capped at SGD 200. While not a huge amount, it’s a benefit worth taking!
Stricter 2026 Withholding Procedures: Starting January 1, 2026, if you wish to apply for treaty rates in Korea, the person responsible for withholding in Korea must submit relevant documents to the National Tax Service by the end of February the following year. Prepare your documents in advance.
Real Estate Income Warning: Unlike employment income or stocks, rental income or profits from selling property are primarily taxed in the "country where the property is located." This means if you profit from selling a Singapore condo, you must follow Singapore law.

4. Practical Tips: Don't Miss These!

Tax issues can turn into a "tax bomb" later, so it's best to prepare in advance. To fully enjoy the benefits of being a Singapore resident, remember these three things:

Issue a Certificate of Residence (COR): To prove to Korean financial institutions or the tax office that you are a Singapore resident, you must have a COR issued by IRAS (Inland Revenue Authority of Singapore). You can apply online via the myTax Portal; it takes about 7–14 days, so get it early.
Manage Travel Records: Keep your passport entry/exit stamps or flight tickets to prove the 183-day rule. If you fall short by just a few days, you could be classified as a non-resident and hit with a high tax rate of 24%.
Utilize the 3-Year Residency Rule: If you plan to work in Singapore for three consecutive years, there is a system where you can apply to IRAS for retrospective resident status even if you don't meet the 183-day requirement in the first or last year. Be sure to check this out.

Knowing your taxes can save you thousands of dollars a year while living in Singapore. I hope today’s content helps you lead a smarter life in Singapore! If you have any questions, feel free to leave a comment.