Non-resident employers include foreign based companies with representative offices registered with International Enterprise Singapore and entities not registered in Singapore.
Do I have to pay tax if I am employed by a non-resident employer
You will be taxed on income earned for the period you rendered services in Singapore even if your employer is not a resident in Singapore, or your income is not paid in Singapore. This also applies if your employer sends you here for training, operating of machinery, conducting and attending meetings.
Taxable income includes any salary, bonus, allowances, honorarium, per diem, accommodation, leave passages, and value of any benefits-in-kind (e.g. food, transport) provided to you by your employer.
Any allowances received from the local sponsor companies are also taxable.
A UK company sent its employee to work in Singapore from 1 Feb 2012 to 30 Jul 2012.
|Salary from UK company for this period
|Other allowances from UK company
|Accommodation etc. provided by local company
|Total income subject to tax in Singapore
How will I be taxed?
- If you work in Singapore for 60 days or less in a calendar year, you will be exempted from tax on your earnings here. This rule does not apply if your stay covers three continuous years or more.
- If you stay or work in Singapore for 61 to 182 days in a calendar year, your income will be taxed at 15% or resident rates for individuals, whichever gives a higher tax.
- If you stay or work in Singapore for 183 days or more in a calendar year, your income will be taxed at resident rates for individuals.
- If you stay or work in Singapore for three consecutive years, your income for all years will be taxed at resident rates.
- The income tax filing takes place during March to April each year. After you have filed your tax return, you will receive a tax bill (Notice of Assessment). You must pay your tax within one month from the date of the tax bill. Payment by GIRO instalment is not applicable for employees of foreign employers.
Letter of Guarantee Requirement
If you are not a Singapore citizen, IRAS will require you to provide, on a yearly basis, a letter of guarantee from a local bank or an established limited company in Singapore, to cover your estimated tax for the coming Year of Assessment.
If there is no letter of guarantee, IRAS will issue an advance assessment to you and you are required to settle your tax in full.
Note: You are still required to file the income tax return even if you have submitted LOG or if an advance assessment has been issued to you.
Your employer should complete the Form IR21 (tax clearance for foreign employees) at least one month before you cease employment or leave Singapore. You must pay all your taxes before leaving Singapore. Refer to Tax Clearance.
If you qualify for exemption from Singapore income tax in respect of Dependent Personal Services rendered in Singapore, refer to Tax Treaty Exemption.
Area Representative Scheme
Under the Area Representative Status, if you operate from a base in Singapore to discharge your regional functions and duties, you may enjoy time apportionment of employment income, subject to qualifying conditions.
If you qualify to be assessed as an area representative, you will be taxed on the amount of your remuneration attributable to the number of days spent in Singapore. However, benefits-in-kind (BIK) provided in Singapore are fully taxable. Refer to Area Representative Scheme.
Tax Treaty Exemption
If you are a resident of a foreign country that has a tax treaty with Singapore, you may be protected from being taxed twice on the same income. This depends on the provisions of the tax treaty. Please use our Tax Treaty Calculator for Personal Services Rendered by Employees (213KB) to check if you are eligible for tax treaty exemption. If you are eligible for tax treaty exemption, you should complete and submit the Claim for Tax Treaty Exemption and Certificate of Residence to IRAS.
Refer to Tax Treaty Relief.