Say how your dividends are taxed and where they will be credited.
Get out your CDP statement and the latest statement from every broker or share plan you hold investments with. For each holding that pays you income, you need to answer two questions: how the payout is taxed, and where the cash lands. Writing both down for every holding shows you where money could be sitting unnoticed or shrinking before it reaches you.
Wei Ling (an invented example) is a Singapore investor with four income-paying holdings. She has two SGX stocks bought through a bank's brokerage, one S-REIT bought through a low-cost app, and a small slice of a US company from a share plan at her last job. In April she checks her bank account and finds only one dividend. She doesn't know where the other payouts went, whether they arrived at all, or whether tax was taken.
She sits down with her statements and maps each holding. Her two bank-brokerage stocks are in her CDP account, and their dividends go to her linked savings account. Her S-REIT is held by the app's custodian. Its distributions were credited to the app's cash balance and had sat there uninvested for months. Her US shares are in a share plan account with a foreign broker, which withheld tax before paying her.
Her information was never hidden. It was spread across four statements, and nobody had put it in one place.
Singapore uses the one-tier system, a term that comes from IRAS. A Singapore-resident company pays tax on its profits, and dividends it pays out of those profits are tax-exempt for the shareholder. IRAS does not tax individuals on one-tier dividends from Singapore-resident companies, and you don't need to declare them on your income tax return. There is no withholding tax and nothing to claim back.
Say a Singapore-resident company declares S$0.10 a share and you hold 1,000 shares (invented example figures). S$0.10 x 1,000 shares = S$100, and you receive the full S$100, with no tax, no withholding and nothing to claim back.
S-REIT distributions follow different rules because a REIT is a trust, not a company. Individuals who hold S-REIT units directly are generally also exempt from tax on distributions, but the reason differs from the one-tier rule. Lesson 4.2, The payout rule and tax transparency, explains how IRAS treats these distributions and why individual unitholders are generally exempt.
A stock listed on SGX is not always a Singapore-resident company. Some SGX-listed companies are incorporated or tax-resident elsewhere, and a listing only shows where the shares trade, not where the company pays tax. The annual report and the dividend announcement state where the company is incorporated, so check one of them before assuming the one-tier rule applies.
The country a foreign company is based in may withhold tax on its dividends before the money reaches you. This is called tax at source, or withholding. US shares are the obvious example: the company pays the dividend, the US withholds tax at source, and a smaller amount arrives. When a foreign dividend arrives smaller than the declared amount, the difference is tax that was withheld, and it isn't an error.
The withholding rate depends on the country, the type of account, the forms you have filed and any tax treaty that applies. Rates change and differ case by case, so look up the rate for your own holding instead of assuming one. The separate course Investing in US and global markets from Singapore covers foreign withholding tax in more depth.
How a share is held decides where its dividend is paid, and Singapore has two main routes.
The first is your own CDP account. CDP is The Central Depository, which is part of SGX. Shares bought through a broker that settles into your CDP account are registered in your name. The company pays dividends to holders on its register, which for these shares means CDP, and CDP credits the cash to the bank account you have linked to your CDP account for dividend crediting. If you have no bank account linked, check the SGX website to see what happens to payments until you link one.
The second is a custodian account. MAS's MoneySense guide to starting trading notes that you can choose to have the shares you buy held in a nominee account of the broking firm. How dividends on those shares reach you, and how long that takes, depends on each broker's terms, so check your broker's account terms to see where and when they are credited. Some brokers also charge a handling fee on each dividend or corporate action. The fee schedule on the broker's website shows whether there is one and how much it is. A fixed handling fee takes a bigger share of a small dividend, so check it if your holdings are small.
Neither route suits everyone. A custodian account can have lower trading costs. A CDP account puts the shares in your name and pays dividends straight into your bank. What matters is knowing which route applies to each holding, so cash doesn't sit unnoticed and any fee is a known cost.
For each income-paying holding, write down three facts:
how it is held: CDP or custodian where its dividends are credited whether a fee or foreign tax comes off before payment
Take each answer from your CDP statement and each broker's fee page, not from memory. For SGX-listed stocks, check the annual report or dividend announcement for the place of incorporation before you mark the payout as one-tier. Once your list is built, Lesson 1.4, Track one dividend and its total return, follows a single payout from start to finish.
In the activity you will build that list for your own holdings, checking your CDP statement and each broker's fee page rather than relying on memory.
For each holding, check whether it sits in CDP or with a custodian. Confirm where its dividends are credited and what fee, if any, is charged.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).