Relocating to Singapore

Tax treatment of relocation benefits such as cash allowances and reimbursements, and home leave passages that you may receive when you relocate to Singapore.

Relocation Allowance and Reimbursement

Relocation benefits include:

  1. Cash allowances given to you for relocating to another country; and
  2. Reimbursements of your expenses related to the relocation to another country.

Cash Allowances for Relocation

The full amount of cash allowances given to cover relocation expenses, whether you have incurred the expenses or not, is taxed as employment income.

Claiming Relocation Expenses as Deductions

Relocation expenses are deductible against the cash allowance provided. The excess of the relocation allowance from the relocation expenses is taxable.

If the relocation expenses claimed exceed the allowance given, the excess will be disregarded and cannot be used to offset against other income.

Find out more about claiming relocation expenses in your income tax return and keeping proper records.

Types of Deductible Relocation Expenses

These relocation expenses are deductible against the cash allowance for relocation:

  1. Cost of airfare to bring you, your family members and pets to the country;
  2. Freight/storage charges to move personal effects;
  3. Cost of temporary accommodation (i.e. hotel or serviced apartment) incurred before the commencement of employment; and
  4. Settling-in expenses (e.g. first purchase of beddings, kitchen appliances, subscription to broadband Internet access and enrolment for immersion programmes for expatriates).

Types of Non-Deductible Relocation Expenses

These relocation expenses are not deductible against the cash allowance for relocation:

  1. Personal expenses such as payment for meals, laundry and transport; and
  2. Recurrent expenses after the initial settling-in period (e.g. ongoing storage costs incurred for storing your personal effects during the period of employment in Singapore).

Relocation Reimbursements

Generally relocation reimbursement is not taxable, as you do not derive a personal benefit. The reimbursement is compensatory in nature and for the benefit of the employer.

Reimbursements for Personal Expenses

Reimbursements of personal expenses that are granted in respect of employment and confer a benefit on you are taxable. They are not relocation reimbursements.

Reimbursements of loss incurred on disposal of personal assets resulting from relocation are taxable because:

  1. The reimbursements of the loss are made in respect of employment (as a consequence of the employer and employee relationship); and
  2. You derive a personal benefit in terms of obtaining an indemnity against personal loss in having sold your personal assets at a lower price.

Home Leave Passages

As a tax concession, only 20% of the cost of the leave passage is taxed. This concession is limited to:

Person whom home leave passage is provided to

No. of home leave passage per year

Expatriate employee

One

Spouse

One

Unmarried child who is:

  • Under 16 years old. If over 16, must be schooling; or
  • Physically or mentally disabled 

Two for each child

For subsequent home leave passages, or where passages are provided to other family members, the full cost of the passage is taxable.

From YA 2018 New!

The home leave passages provided to expatriate employees, their spouses and children are taxable in full.

Lump Sum Cash for Home Leave Passages

When the company pays a lump sum cash amount for the home leave passage, the full cash amount (100%) is taxable.

Leave Passages on First Appointment and Termination of Employment

Leave passages provided to a foreigner and his family on taking up his first appointment in Singapore, and on their return upon termination of employment are not taxable.

RATE THIS PAGE

  • Strongly Disagree
  • Strongly Agree

Information is easy to understand.

Information is useful.

Information is easy to find.

 
Please email us if you would like us to respond to your enquiries.