Foreign Employers

Foreign employers include representative offices registered with International Enterprise Singapore and other entities not registered in Singapore. Foreign employers are considered non-resident employers for tax purposes.

Services Rendered in Singapore

You will be taxed on income earned for the period you render services in Singapore even if your income is not received in Singapore.

This also applies if your employer sends you here for training, operating of machinery, site visits, assignments, conducting and attending meetings.

 

Income to be Assessed for Employees of Foreign Employers

(1) 60 Days or Less in a Calendar Year

If you are a non-resident and exercise employment here 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.

(1.1) Working in Singapore

For an employee who is based in Singapore, the number of days of employment in Singapore includes weekends and public holidays. In addition, any absences from Singapore that are temporary (e.g. overseas vacation leave) or incidental to your employment (e.g. business trips) will also be included in the count of total days of employment in Singapore.

 

(1.2) Travelling into Singapore for Business Purposes

 

If you are based outside Singapore and travel into Singapore for business purposes, the number of days of employment in Singapore includes the entire visit from the day of arrival to departure, regardless of whether the day of arrival/departure falls on a weekend/public holiday. This is on the basis that employment is exercised in Singapore for any day that you are physically present in Singapore, regardless of whether it is a work day or rest day.

A China company sent its employee here for a business trip for 1 week from Sunday to Saturday:  

 Sun

(Day of arrival)

Mon to Fri  

(Work assignment) 

Sat

(Day of departure) 

The number of days of employment in Singapore was 7 days (Sunday to Saturday).  

A Malaysia company sent its employee here for a business trip for 1 week from Wednesday to Tuesday:  

Wed

(Day of arrival)

Thurs to Mon

(Work assignment)  

Tues

(Day of departure)

 The number of days of employment in Singapore was 7 days (Wednesday to Tuesday).  

Extension of stay after completion of work assignment

There could be situations where presence in Singapore is not considered as arising out of employment:

If you had fully discharged your employment duties and extended your stay in Singapore solely for leisure (i.e. you were on vacation leave), your presence in Singapore during the extended stay including weekends would be excluded from the number of days of employment in Singapore. This is on the basis that your presence on those days was not arising out of employment, as supported by the fact that you were on vacation leave.  

An employee from a US company arrived here on Wednesday for a work assignment. He completed his assignment on Friday and extended his stay here for leisure.  He was on vacation leave on Monday to Tuesday and left Singapore on Tuesday.  

Wed* to Fri

(Work assignment)

*day of arrival

Sat & Sun

Mon to Tues#

(Vacation Leave)

#day of departure

 

The number of days of employment in Singapore was 3 days (Wednesday to Friday). The 4 days from Saturday to Tuesday were excluded from the count on the basis that they were not arising out of employment, as supported by the fact that the employee was on vacation leave from Monday and Tuesday. 

Similarly, the same treatment applies if you were on vacation leave prior to your commencement of employment in Singapore. 

An employee from an Australia company arrived here for a vacation on Thursday and Friday.   He was on a work assignment from Monday to Wednesday and left Singapore on Wednesday: 

Thurs* & Fri

(Vacation Leave)

*day of arrival

Sat & Sun

Mon to Wed#

(Work assignment)

#day of departure

The number of days of employment in Singapore was 3 days (Monday to Wednesday). The 4 days from Thursday to Sunday were excluded from the count on the basis that they were not arising out of employment, as supported by the fact that the employee was on vacation leave from Thursday and Friday.

(2) 61 to 182 Days in a Calendar Year

If you do not fall under (1) and 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 the higher tax.

(3) 183 Days or More in a Calendar Year

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.

(4) Stay or Work in Singapore for Three Consecutive Years

If you stay or work in Singapore for three consecutive years, your income for all years will be taxed at resident rates for individuals.

Taxable Income

Working in Singapore

Income that is taxable includes:

  • 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; and
  • Any allowances paid or benefits-in-kind provided by the local sponsor company.

    A UK company sent its employee to work in Singapore from 1 Feb 2016 to 30 Jul 2016.

    Salary from UK company for this period

    :S$30,000

    Other allowances from UK company for this period

    :S$10,000

    Accommodation etc. provided by Singapore company

    :S$4,000

    Total income subject to tax in Singapore

    :S$44,000

    Travelling into Singapore for Business Purposes

    If you are based outside Singapore and travel into Singapore for business purposes, taxable income includes:
    • Salary, bonus, allowances, per diem, accommodation and value of any benefits-in-kind (e.g. food, transport) provided to you by your employer; and
    • Any allowances paid or benefits-in-kind provided by the local sponsor company.

    Revised Tax Treatment for Employees Travelling into Singapore On or After 1 January 2016 for Business Purposes

    1. The following payments by your employer are not taxable: 
    •   Accommodation
    •   Travelling and entertainment (which have been expended for business purpose)

        2.      Introduction of an IRAS acceptable rate for per diem allowances for employees travelling into Singapore for business purposes

    • Per diem allowance would not be taxable unless it is in excess of the acceptable rate.  For employees who travel into Singapore for business purposes, the acceptable rate for 2016 and 2017 is $141 per day.
    • The acceptable rates determined by IRAS are strictly for Income Tax purpose and are reviewed yearly.  The rates do not determine the amount of per diem allowance that an employer wishes to pay its employees.

    A US company sent its employee to Singapore for business trips during the period 1 Feb 2017 to 30 Jul 2017.  The total number of days of employment in Singapore during the year 2017 was 61 days and the following payments were made by his US company for the 61 days:

    • Salary
    • Per diem allowance ($181 per day)
    • Accommodation
    • Travelling and entertainment allowances (expended for business purposes)
     

    Salary from US company

    Per diem allowances in excess of the acceptable rate (acceptable rate for 2017 is S$141 per day)

    (S$181 - S$141= $40 per day)

    :S$8,000

     

    :S$2,440

     Total income subject to tax in Singapore:S$10,440

     

    Accommodation provided, travelling and entertainment expenses which have been expended for business purposes are not taxable for travels into Singapore on or after 1 Jan 2016 for business purposes.

     

Filing Income Tax

The income tax filing takes place during Mar to Apr each year.

The foreign employer should prepare the Form IR8A and related appendices for you by 1 Mar each year. You have to file your tax return by 15 Apr each year.

Travelling into Singapore for Business Purposes

If you are based outside Singapore and travel into Singapore for business purposes, please submit your schedule of physical presence in Singapore in the following format:-

Date of Arrival Date of DepartureNumber of Days Purpose of Visit 
    

 

Paying Income Tax

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 is not applicable for employees of foreign employers.

Letter of Guarantee (LOG) Requirement

A non-Singapore citizen is required to forward a Letter of Guarantee from a local bank or an established limited company in Singapore, to cover the estimated tax payable for the coming Year of Assessment.

Please note the following:

  • The Letter of Guarantee  issued by a Representative Office is not acceptable.
  • The Letter of Guarantee has to be submitted to IRAS on a yearly basis.
  • In the absence of the Letter of Guarantee, an advance assessment will be issued to you and you are required to settle your tax in full.
  • You are still required to file the income tax return even if you have submitted the LOG or if an advance assessment has been issued to you.

Tax Clearance Obligations

Your employer should complete the Form IR21 at least one month before you cease employment or leave Singapore. More information on tax clearance can be found here .

Travelling into Singapore for Business Purposes

If you are based outside Singapore and travel into Singapore for business purposes, please submit your schedule of physical presence in Singapore in the following format:-

Date of Arrival Date of DepartureNumber of Days Purpose of Visit 
    

 

All taxes must be paid before you leave Singapore.

If you are claiming for exemption from Singapore income tax in respect of Dependent Personal Services rendered in Singapore, please refer to Exemption under Avoidance of Double Taxation Agreement .

Schemes to Reduce your Tax Liability

1.  Area Representative Scheme

Under the Area Representative scheme, 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 provided in Singapore are fully taxable.

For more details, please refer to Area Representative scheme.

 

2. Exemption under Avoidance of Double Taxation Agreement

If you are a tax resident of a country that has a tax treaty with Singapore, it may protect you from being taxed twice on the same income. This depends on the provisions of the tax treaty. 

The tax treaty article for Dependent Personal Services may provide for exemption from Singapore income tax if certain conditions are met. Please use our Tax Treaty Calculator for Personal Services Rendered by Employees to check if you are eligible for the tax exemption.

If you are eligible for the tax treaty exemption, please complete and submit the Claim for Tax Treaty Exemption and Certificate of Residence to IRAS. 

Common Scenarios

Japan Headquarters sent me, an engineer, to Singapore to assist in the Singapore operations for one year. I remained under the employment of the Japan Headquarters.

My salary continued to be paid in Japan by the Japan Headquarters. The Singapore company did not incur any charges or expenses for my stay in Singapore, except for the housing fees for my apartment.

Are all remuneration received in Japan, including housing fees paid by the Singapore company, taxable?

Yes.

Is there any tax exemption if I have also been taxed on the same income by Japanese tax office?

You may claim for tax exemption under Article 15 of the Avoidance of Double Tax Agreement (DTA) between Singapore and Japan if you meet all of the following conditions:

  1. You are a resident of Japan;
  2. You are present in Singapore for not more than 183 days in any consecutive twelve-month period;
  3. Your remuneration is paid by, or on behalf of, an employer who is a not a resident of Singapore; and
  4. None of your remuneration is borne by a permanent establishment or a fixed base that your employer has in Singapore.

Please use our Tax Treaty Calculator for Personal Services Rendered by Employees 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.

I am a national of People's Republic of China employed by a subsidiary company in China. I came to Singapore in July 2016 for a six-month training course at the Singapore Headquarter Office

I am on a training work permit pass. The Singapore Headquarter Office pays me an overseas/training allowance of S$20 - $S40 per day. The allowance will be re-charged to the subsidiary company in China.

Is my employer required to seek tax clearance before I leave Singapore?

Yes, your employer is required to seek clearance before you leave Singapore. Your employer should complete the Form IR21 by providing details of your income (including benefits-in-kind such as accommodation) from your employment in Singapore.

Can I claim any tax exemption on my employment income?

You may claim for tax exemption under Article 15 of the Avoidance of Double Tax Agreement (DTA) between Singapore and People's Republic of China if you satisfy all of the following conditions:

  1. You are a resident of People's Republic of China;
  2. You are present in Singapore for not more than 183 days within any twelve-month period;
  3. Your remuneration is paid by, or on behalf of, an employer who is not a resident of Singapore; and
  4. None of your remuneration is borne by a permanent establishment or a fixed base that your employer has in Singapore.

Please use our Tax Treaty Calculator for Personal Services Rendered by Employees to check if you are eligible for the 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.

I am employed by the HQ office in my home country to work in Singapore for three years. I do not qualify for tax treaty exemption and will be taxed on the income I earn in Singapore.

Can I apply for instalment payment for my tax?

No, payment by GIRO instalment is not applicable for employees of foreign employers. You are required to settle your tax in full.

  • Q1: Employee A was based overseas and his overseas employer sent him to Singapore for a business trip in 2016. He received an allowance to cover his travelling expenses and living expenses. How should the amounts be reported to IRAS?

    A1. Where the total allowance covers non-taxable business expenses (for example airport transfer, entertainment for business purposes etc), the employer has to ascertain the actual amounts of such expenses and exclude them from the allowance. The balance, if any, in excess of IRAS acceptable rate is to be reported as income in the Form IR8A.  

     

  • Q2: Employee B was based overseas and his overseas employer sent him to Singapore for a business trip in 2016. He was provided with hotel accommodation and received an allowance to cover his travelling expenses. Is the allowance/reimbursement for expenses incurred for travel from the hotel to the place of work and airport taxable?

    A2: Where the employee travels into Singapore on or after 1 Jan 2016 for business purposes, payment for travelling expenses from hotel to the place of work/airport and vice versa will be considered as business expense and not taxable.

     

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