Non-Resident Professionals vs Employees
Differences between non-resident professionals and employees in relation to tax obligations, tax treatment and acknowledgements.
Tax Obligations of Payer/Employer
Non-resident professional | Non-resident employee |
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Payer must: - Withhold tax at 15% of gross income or 22% (20% for period of engagement prior to 1 Jan 2016) of net income if option is exercised;
- e-File via myTax Portal and select the nature
of payment ‘For payment to non-resident individual/firms exercising
profession/vocation in Singapore’; and
- Pay the withholding tax by the 15th of the second month from the date of payment if date of payment is from 1 Jul 2012.
| Employer must: - File Form IR21 at least one month before cessation of employment; and
- Withhold all monies due to employee until tax clearance is given or expiry of 30 days after IRAS has been notified, whichever the earlier.
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Acknowledgements
Non-resident professional | Non-resident employee |
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- Payer will receive a Confirmation of Payment (CP) letter
- No tax bill will be issued to the non-resident professional.
| - Employee will receive a tax bill.
- Employer will receive a Directive on the amount of monies to be remitted to IRAS and release the balance to employee, if applicable.
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Tax Treatment
Non-resident professional | Non-resident employee |
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No tax exemption for short-term engagement of 60 days or less in a calendar year | - Tax exemption is applicable for short term employment of 60 days or less in a calendar year.
- Employment income taxed at non-resident rate of 15% or resident rate, whichever that gives rise to higher tax for employment exercised for 61 to 182 days in a calendar year.
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