In Singapore, withholding tax is a very important tax applicable when doing business with foreigners. Singapore tax law states that whenever a resident or individual makes a payment to non-local businesses or individuals, a portion of the money is withdrawn and handed over to the Singapore Inland Revenue Authority (IRA). Withholding tax is applicable to numerous types of payments in Singapore. All these payments are mentioned in section 45 of the Singapore Tax Law. Therefore all payments listed in this section must comply with withholding tax. The donations highlighted in section 45 include foreign companies, professionals, artists performing in public and administrators. Detailed explanation of the types of payments subject to withholding tax Carrying out financial activities with non-resident professionals Foreign professionals are experts in a specific sector who opt to practice the profession independently for a maximum of 183 days a year under a service contract . Persons classified as foreign professionals include foreign representatives, specialists, consultants and permanent workers of a non-resident company. In this case, 15% of the gross salary is taxed and paid by the employer to the IRA. Alternatively, if the foreign professional decides to be taxed on net income, then 20% is withheld as non-resident tax. Please note that 20% is only applicable when tax is levied on net income and not gross income. Payments made to foreign artists or public entertainers. Entertainers are classified into two usual public and sports performers. Public performers include musicians, singers, actors and dancers while sportspeople mainly include athletes. A foreign entertainer or artist will only be considered non-resident... half paper... business know-how. Finally, another 15% is paid as rent of commercial premises and use of any other movable property. ConclusionNormally, withholding tax is paid on the 15th of the month following the payment date. For example, if a transaction was made on 24 June 2013, the IRAS should receive the withholding tax by 15 July 2013. Payments must be confirmed 21 days after payment and form IR37D (http://www .iras .gov.sg/irasHome/uploadedFiles/Businesses/Withholding_tax/Form%20IR37D (1).xls) is received. You will then be given a Payment Confirmation Letter (CP). Please note that the IR37D form must be completed in full. Failure to properly complete the IR37D form may interfere with the process of delivering the confirmation letter. Therefore, receipt of confirmation of payments is determined by the correct completion of the IR37D form.