Singapore Personal Tax for Non-Residents

  • Post category:Singapore

Singapore Personal Tax for Non-Residents is applied to the income that accrues or is earned in Singapore. Only if it is received in Singapore by a resident person through a Singapore partnership is income from sources outside of Singapore taxable. 

Non-Singaporeans and non-Singapore Permanent Residents are typically treated as foreigners for tax reasons by Singapore’s tax authority, the IRAS (Inland Revenue Authority of Singapore). These people are subject to income tax on all income earned in Singapore, depending on their tax residency status.

Singapore Personal Tax for Non-Residents

FOREIGNERS’ TAX RESIDENCY IN SINGAPORE

The cut-off periods for tax residency are 60 days and 183 days, and they determine the foreign resident’s tax rate in Singapore. 

Minimum 183 Days

A foreigner is considered a tax resident under Singapore’s regulations on tax residence if they live or work there for at least 183 days during a calendar year. Notably, the number of days counted includes weekends, federal holidays, and any short-term absences from work due to travel or official business.

The implications will be:

Period of stay (including work) in Singapore Tax-resident status Tax liability
At least 183 days in a year Yes Income taxed at progressive resident rates
At least 183 days for a continuous period over two years Yes Income taxed at progressive resident rates
At least 183 days for a continuous period over three consecutive years Yes Income taxed at progressive resident rates

The foreigner’s foreign-sourced income brought into Singapore is tax-exempt, even though he or she may be able to claim tax reliefs (described below) when submitting the Form B1 applicable to tax residents.

Do keep in mind that, according to the regulations, a foreigner who stays or works in Singapore continuously for three years is recognized as a tax resident for all three years, even if their total time in Singapore in the first and third years is less than 183 days.

PERSONAL INCOME TAX IN SINGAPORE FOR NON-RESIDENT EMPLOYEES

A non-employment resident’s income in Singapore is taxed at the greater of:

15% of the gross amount or the corresponding tax under the resident basis (without taking into account personal exemptions or provident fund contributions).

SCHEME FOR AREA REPRESENTATIVES

By way of concession, an area representative is subject to Singaporean taxation on a portion of their overall compensation package based on the percentage of working days they spend there each year.

Benefits-in-kind offered in Singapore, however, are wholly taxable.

One must meet the four requirements listed below to be eligible to serve as an Area Representative:

  • You work for a non-resident employer in a representative office;
  • you are based in Singapore out of geographical necessity; 
  • you travel a lot while performing your duties for the foreign employer; 
  • and your foreign employer pays your salary rather than charging it to a permanent establishment in Singapore.

If your employment spans a continuous period of at least 183 days spanning two years (under the two-year administrative concession) or three continuous years (under the three-year administrative concession), you will be regarded as a tax resident in Singapore for each year under the Area Representative Scheme, even though your physical presence in Singapore may be less than 183 days in a calendar year due to significant travelling.

LETTER OF GUARANTEE (LOG)

In order to pay his or her estimated tax for the upcoming Year of Assessment, a foreign worker who is employed by a foreign employer (such as a representative office or business not registered in Singapore) must submit a LOG from a local bank or an established limited company in Singapore. A pre-assessment will be issued if the LOG is not given to the IRAS.

WHAT DOES THE NOT ORDINARILY RESIDENT SCHEME INVOLVE?

A specific group of people in Singapore, known as the Not Ordinarily Residents (NOR), are granted favourable tax treatment during a five-year assessment period.

An individual must fit the criteria to be eligible.

  • a non-resident for tax purposes in Singapore for the previous three years of assessment; 
  • and in the year of assessment in which the person met the requirements for the NOR status, they had to be Singapore tax residents.

The foreigner must only be a tax resident during the first year of assessment, not the entire five-year qualifying term, in order to maintain their NOR taxpayer status.

BENEFITS OF THE NOT ORDINARILY RESIDENT SCHEME

If a NOR taxpayer spends at least 90 days outside of Singapore on business and has at least $160,000 in total Singapore employment income, they only pay income tax on the portion of their employment income that corresponds to the amount of days they spend there.

A NOR taxpayer benefits from tax exemption on employer contributions to non-mandatory foreign pension funds, which would otherwise be subject to tax in his hands.

Less Than 183 Days

Corporate conference As should be prominent, if a foreign national spends less than 183 days in Singapore during a calendar year, they are considered a non-resident for tax reasons. For these individuals:

Non-residents are not eligible for any tax breaks while filing Form M, and only income received in Singapore is subject to a flat tax of 15%. (or at progressive resident rates, if it gives a higher tax liability). Notably, director’s fees are taxed at a flat rate of 20%, which is slightly higher.

Equal to or less than 60 days

Foreign visitors to Singapore who stay for less than or equal to 60 days are treated similarly to non-residents by IRAS and are not subject to taxation.

Please be aware that this exemption does not apply to company directors, performers for the general public, foreign specialists, speakers from other countries, advisors to the queen, consultants, trainers, coaches, etc. (all of whom fall under the category of “professionals”).

The IRAS immediately treats every foreign national who receives a work permit with a minimum one-year validity in Singapore as a tax-resident. When the foreign employee’s job ends later, the status of tax residency is reevaluated. The foreigner’s status changes to a non-resident if the duration of their stay or employment is fewer than 183 days.

TAX CLEARANCE FOR NON-CITIZEN EMPLOYEES

A non-citizen employee who expects to leave Singapore for more than three months must submit Form IR21 at least one month before they stop working there (including when they are posted abroad). Employers who do not comply may be subject to a $1,000 maximum penalty and any unpaid taxes owed by the employee.

Date of Filing in Singapore

Singapore’s deadline for submitting taxes Every year, by April 15th, IRAS requires that all tax returns be submitted (together with fully filled out paper tax forms). Those who use the IRAS e-filing system have a further three days, until April 18, to submit their applications.

The filing date may also be extended under extreme circumstances. But for that, the required application must be submitted to IRAS by March 31. It must include the full applicant’s name, tax reference number, full justification for the requested extension, and estimated chargeable income.

Please be aware that IRAS may occasionally suspend the obligation for taxpayers who only have Auto-Inclusion Scheme (AIS) for Employment Income – IRAS for employment income and who have the same relief claims as the taxpayer to file an income tax return.

INCOME TAX RELIEFS FOR SINGAPORE TAX RESIDENTS

Local or foreign tax-resident

Although Singapore’s progressive personal income tax rates range from 0% to 22%, using the various programs the Singapore Government has established could result in an effective payable tax that is substantially lower. These include exemptions from paying taxes on earned income, child, parent, and spouse support, life insurance policies, course fees, and the foreign maid levy, as well as the exemption from paying taxes on Supplementary Retirement Scheme (SRS). 

If you want to form a business in Singapore, refer to our page, Singapore company formation for more information.

FAQs

How much is personal income tax in Singapore non resident?

Except for employment income, which is taxed at a flat rate of 15% or at resident rates with personal relief, whichever results in a greater tax, non-residents pay a flat rate of 22% (24% from the year of assessment 2024).

What is the 183 days tax rule in Singapore?

If you work in Singapore for fewer than 183 days, you will be regarded as a non-resident. If you live or work in Singapore for a continuous period of at least 183 days, you will be considered a tax resident for two years under the two-year administrative concession.

Can a foreigner leave Singapore before their taxes are cleared?

You must make sure that your foreign employee has paid all taxes due before departing Singapore when their employment with you in Singapore comes to an end. The IRAS website provides a description of this procedure, which is known as Tax Clearance.

Do foreigners pay income tax in Singapore?

Foreigners who work in Singapore, whether as employees or self-employed individuals, are generally subject to Singapore’s personal income tax. However, the tax rules and rates may vary depending on the foreigner’s tax residency status and the type of income they earn in Singapore.

Do non-residents have to pay income tax?

If a foreigner is a non-resident of Singapore, they will only be taxed on income earned in Singapore. The tax rates for non-residents are higher than those for tax residents, depending on the amount of income earned.