Research and find out what tax reliefs and deductions you are entitled to, so that you can decrease your taxable income and pay less tax. Some common reliefs are Earned Income Relief, CPF Relief, and Parent Relief. Additionally, consider claiming deductions for expenses such as medical expenses, donations, and certain business expenses.
2. Explore tax-exempt investments:
Tax-exempt investment options like the Supplementary Retirement Scheme (SRS) or Central Provident Fund (CPF) contributions may qualify for tax relief or offer tax-free growth. This helps to reduce your taxable income and allow you to pay less tax.
3. Optimize your tax residency status:
If you have the flexibility to manage your tax residency status, strategically plan your stay in Singapore. Being classified as a tax resident can provide access to more favorable tax rates and reliefs compared to non-residents, further minimizing your income tax.
4. Leverage tax treaties:
If you earn income from overseas sources, check if Singapore has a tax treaty with the respective country. Tax treaties often include provisions to prevent double taxation or offer reduced tax rates for specific types of income to help you lower the income tax you pay to the Singapore government.
5. Consider the timing of income and expenses:
Evaluate the timing of your income and expenses to optimize your tax position. For example, if you have control over bonuses or capital gains, you can defer or spread them across different tax years to minimize your tax liability.
6. Maximize CPF contributions:
Increasing your contributions to the Central Provident Fund (CPF) not only aids in retirement savings but also reduces your taxable income. CPF contributions enjoy tax relief, providing an opportunity to lower your overall tax burden.
7. Seek professional advice:
Engage the services of a tax professional or consult with tax experts to gain better insights into your specific circumstances. They can offer personalized guidance and help identify additional tax planning opportunities.