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Singapore: Taxation of individuals working overseas

Singapore: Taxation of individuals working overseas

The tax authority announced in August 2019 that administrative concessions that have allowed Singapore individuals to elect to be treated as non-residents for tax purposes will no longer be available. This change could impose additional tax obligations for Singapore employees and their overseas employers, and could possibly place overseas-based Singapore employees at a disadvantage when compared to overseas-based non-Singapore employees.

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In general, Singapore citizens who work overseas are regarded by the Inland Revenue Authority of Singapore as tax residents of Singapore because their absences from Singapore are viewed as temporary and not an intent to establish residence abroad. The IRAS, however, has allowed Singaporeans the choice of being treated as non-residents for any tax year when they work abroad for at least six months (the intention being to remove any disincentive for Singapore persons to work overseas). As a non-resident, any remittances made to them would not be subject to tax in Singapore.

The “not ordinary resident” tax scheme, however, is being repealed after 2019. Therefore, individuals that are residents of Singapore in 2020 and later will no longer be eligible for the tax benefits available for non-residents under this program.


Read an August 2019 report [PDF 617 KB] prepared by the KPMG member firm in Singapore
 

Subsequent clarification by tax authority

The Inland Revenue Authority of Singapore in November 2019 advised that the rule change announced in August 2019 (described above) would only affect Singaporeans who have not been employed overseas for the whole year. These rule changes would not affect the treatment of Singaporeans who have been employed overseas during the whole of the year preceding the year of assessment.

Furthermore, concerning business travelers to Singapore, if a Singapore citizen working overseas elects to be assessed as a non-resident and limits his or her business trips to Singapore to not more than 60 days in a calendar year, the income relating to the business trips in Singapore would be exempt from tax.


Read a November 2019 report [PDF 244 KB] prepared by the KPMG member firm in Singapore

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