Tax Clearance Process for Individuals (Non-Citizen Employees)

Tax Clearance process applies to all work pass holders including Personalised Employment Pass (PEP) holders.

If your contract for work is about to end or you decide to work for another company or plan to leave Singapore for more than three months, your employer must notify us at least one month in advance by filing the Form IR21, and withhold all monies due to you from the date when they are aware of your impending cessation of employment or departure from Singapore. This process is known as Tax Clearance.

If your last employer has not sought tax clearance for you, you must notify IRAS via email or post at:

Inland Revenue Authority of Singapore
55 Newton Road
Singapore 307987

Give Notice to Your Employer

Your employer must inform IRAS as soon as they know you are leaving. For example, if you tender resignation on 16 Aug 2016 giving one month's notice to your employer, your last day is 15 Sep 2016.

IRAS will work out your tax liability, up to 15 Sep, the last day of your work. This gives you time to settle all your taxes before you either leave Singapore or move to a new job.

Employer Notifies IRAS and Withholds All Monies Due to You

Your employer provides IRAS with your employment details and income information by filing Form IR21.

To ensure that you pay all your taxes before you leave Singapore, your employer is required to withhold payment of all monies (including salary, bonus, overtime pay, leave pay, allowances, gratuities, lump sum payments, etc.) due to you from the day you gave notification of your intention to leave the job or depart from Singapore.

You should check with your employer whether the Form IR21 has been filed.

IRAS Processes Tax Clearance

Generally, 80% of the e-filed Form IR21 will be processed within 7 working days . For paper filing, 80% are processed within 21 days .
Tax clearance will take longer if information is incomplete or IRAS needs clarification on the employment details submitted.

IRAS Determines Your Tax Liability

Based on the income information in the Form IR21, IRAS will work out your tax liability. You will be assessed on:
  • The income earned in the year of departure; and
  • The income earned in the preceding year that has not been assessed at the point of tax clearance.

Taxable Income

Income that will be assessed to tax by IRAS includes the following:

  • Employment income such as:
    • Salary in-lieu of notice
    • Gratuity for past services payable at the end of contract
    • Existing share options or awards

      If you have any existing share options or awards on hand which have yet to be exercised or vested, you will be deemed to have derived gains from these at the point of tax clearance. This also applies to those with selling restrictions. Please refer to Deemed Exercise Rule for more information.
  • Severance payments

    For severance payments received in the nature of compensation for loss of office, such payment may not be taxable. Your employer should provide IRAS with the necessary information for review.
  •  Withdrawal from SRS Scheme

    If you have been contributing to the Supplementary Retirement Scheme (SRS) and plan to withdraw from the scheme, such early withdrawals are taxable Your SRS Operator will  withhold tax from such withdrawals. If you wish to have this offset against your income tax bill, you should provide IRAS with the SRS Statement of Contribution/Withdrawal (for Tax Clearance) Form, duly certified by the SRS Operator.

Employer Receives Clearance Directive

Once your tax liability has been determined, IRAS will send a Tax Clearance Directive to your employer. The employer must remit to IRAS the amount payable as stated in the directive. If the monies withheld are more than the amount payable stated in the directive, employer will release the balance to you.

Employee Receives the Tax Bill (Notice of Assessment)

IRAS will send you the tax bill. If the monies withheld from your payroll are not sufficient to pay your taxes, you must settle the difference before departure. If the taxes are not settled, you will be stopped from leaving Singapore. In such instance, you will need a release letter from IRAS.

Pay Taxes

Upon clearance,

  • Your existing GIRO Instalment Plan will be terminated;
  • Your deferred tax payment, granted to you on gains from share options and awards, plus interest will become due immediately;
  • You must make full payment to settle your outstanding taxes. For details on how to pay, please refer to Payment Options. Please note that GIRO instalment is not applicable to clearance cases.

If the taxes are not settled, IRAS may instruct your bank to remit the tax to IRAS as part of our tax recovery process.

Points to Note

Upon tax clearance, you may be assessed as a non-tax resident if you worked for less than 183 days. However, if your period of stay (inclusive of work) in Singapore is at least 183 days in the relevant calendar year, you will qualify to be assessed as a tax resident which may reduce your tax. Please complete and send in the Request for Tax Reassessment from 'Non-Resident' to 'Resident' Status form. For objection to income/relief, please provide the details for our review.

Regardless of any objection, the full tax payable must be settled immediately. IRAS will review and inform you of the outcome of the objection. If there is any tax overpayment resulting from the amended tax bill, IRAS will refund you within 30 days.

In the event that there is a credit balance in your account due to re-assessment, a cheque will be sent to your last known address as per IRAS' records. Please update your mailing address so that future correspondence from IRAS can reach you promptly. To update your address, log in to myTax Portal using your SingPass or IRAS PIN. If you do not have SingPass or an IRAS PIN, please apply for one at IRAS website.

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