You will be able to say how your dividends are taxed and where they will be credited.
Wei Ling holds four things that pay her income: two SGX stocks she bought through a bank's brokerage, one S-REIT she 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 checked her bank account and found one dividend. The others had arrived somewhere, or not, and she was not sure where to look or whether any tax had been taken.
This lesson answers two practical questions for each holding: how the payout is taxed, and where the cash lands.
Singapore uses what IRAS calls the one-tier system. A Singapore-resident company pays tax on its profits, and the dividends it pays out of those profits are then tax-exempt in the hands of the shareholder. IRAS does not tax individuals on one-tier dividends from Singapore-resident companies, and you do not need to declare them on your income tax return.
So when a Singapore-resident company declares a dividend of S$0.10 a share and you hold 1,000 shares, you receive S$100, and that is the end of it for tax. There is no withholding, and nothing to claim back.
S-REIT distributions follow different rules, because a REIT is a trust and not a company. Lesson 4.2, The payout rule and tax transparency, explains how IRAS treats them. For now, note that individuals who hold S-REIT units directly are generally exempt from tax on the distributions as well, but the reason is different.
A stock listed on SGX is not always a Singapore-resident company. Some SGX-listed companies are incorporated or tax-resident elsewhere. The listing tells you 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 before you assume the one-tier rule applies.
Dividends from companies outside Singapore can have tax withheld by the other country before the money reaches you. Wei Ling's US shares are the obvious case. The company pays the dividend, the US withholds tax at source, and a smaller amount arrives.
The rate depends on the country, the type of account, the forms you have filed and any tax treaty that applies. These change and differ case by case, so look them up rather than assuming. The investing course Investing in US and global markets from Singapore covers foreign withholding in more depth. The point for this course is simpler: a foreign dividend may arrive smaller than the declared amount, and the difference is tax, not a mistake.
How you hold a share decides where its dividend is paid. There are two main routes in Singapore.
The first is your own account with CDP, 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 in its register, which for you means CDP. CDP then credits the cash to the bank account you have linked to your CDP account for dividend crediting. If you have not linked one, check the SGX website for what happens to your payments until you do.
The second route is a custodian account. Many brokers, especially lower-cost apps, hold shares on your behalf in an account in their own name or a nominee's name. The company pays the dividend to the custodian. The custodian then credits your trading account, which may take longer, and some brokers charge a handling fee on each dividend or corporate action. The fee schedule on the broker's website tells you if there is one and how much.
Neither route is right for everyone. A custodian account can have lower trading costs, while a CDP account puts the shares in your name and the dividends straight into your bank. What matters is that you know which applies to each holding, so the cash does not sit unnoticed and any fee is a known cost. A fixed handling fee takes a bigger bite from a small dividend, so check it if your holdings are small.
When she sat down with her statements, Wei Ling found her two bank-brokerage stocks were in her CDP account, and their dividends went to her linked savings account. The S-REIT was held by the app's custodian, and its distributions were credited to the app's cash balance, where they had been sitting uninvested for months. The US shares were in a share plan account with a foreign broker, which had withheld tax before paying her.
None of that was hidden. It was spread across four statements, and nobody had put it in one place.
For each holding you own, you want three facts written down: how it is held, CDP or custodian, where its dividends are credited, and whether a fee or foreign tax comes off first. Lesson 1.4, Track one dividend and its total return, then follows a single payout end to end.
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.
Check how each of your holdings is held, CDP or custodian, and confirm where its dividends are credited and any fee charged.
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