Tax information: Leaving Singapore
Welcome to your tax guide on leaving Singapore, produced by Deloitte. Looking for tax information about going to Singapore, Click here
This document has been prepared based on the legislation and practices of the country concerned as at 01 April 2009. Tax legislation and administrative practices may change, and this document is a summary of potential issues to consider. This document should not be used as a substitute for professional tax and immigration advice which should be sought for the country of arrival and departure in advance of moving in order to discuss your specific circumstances.
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Before/once you departQ. Should I complete any documentation prior to leaving Singapore?
A. Before leaving Singapore, an individual should do the following:
a) Clear your taxes (for non-Singapore citizen employee).
b) Update Inland Revenue Authority of Singapore (IRAS) on the change in correspondence address.
c) Advise the IRAS on the period of absence from Singapore.
Q. Is it beneficial to open an offshore bank account in comparison to retaining an account on the Singapore mainland?
A. Singapore tax is not a consideration as interest received from deposits with approved banks or licensed finance companies in Singapore is not taxable and Singapore does not tax sources of income from outside Singapore. However, you should check the implications for the country you are resident in.
Q. What is the name of the Singapore tax authority?
Inland Revenue Authority of Singapore
The website is http://www.iras.gov.sg/ESVPortal/Home/index.asp
Q. Will I be regarded as not resident in Singapore during my period overseas?
A. A Singapore citizen is a tax resident in Singapore if he normally resides in Singapore except for temporary absences that are consistent with the claim to be a resident. He may elect to be treated as a non-resident for Singapore tax purposes, if he worked overseas for at least six months during the year.
A foreigner will be regarded as a tax resident in the departure year if he:
- Is residing or working in Singapore for at least 183 days in that calendar year;
- Arrived in Singapore on or after 1 January 2007 and resides or works in Singapore for at least 183 days straddling over 2 calendar years even though the number of days in Singapore is less than 183 days in the departure year (2-years residency concession);
- Resides or works in Singapore for 3 consecutive years even though the number of days in Singapore is less than 183 days in the departure year (3-years residency concession).
See examples below.
2-years residency concession
|
Year
|
Period
|
Number of Days
|
|
1
|
1.9.2008 to
31.12.2008 |
122
|
|
2
|
1.1.2009 to
15.3.2009 |
74
|
3-years residency concession
|
Year
|
Period
|
Number of Days
|
|
1
|
1.9.2008 to 31.12.2008
|
122
|
|
2
|
1.1.2009 to 31.12.2009
|
365
|
|
2
|
1.1.2010 to 1.3.2010
|
60
|
Q. What rate of tax will I pay in Singapore?
A. Please refer to resident and non-resident tax rates below.
Income tax rates for resident individuals with effect from Year of Assessment 2009 for income earned in year 2008:
|
Taxable income base (SGD) |
Cumulative tax on base (SGD) |
Tax on amount above base (%) |
20,000 |
0 |
3.5 |
30,000 |
350 |
5.5 |
40,000 |
900 |
8.5 |
80,000 |
4,300 |
14.0 |
160,000 |
15,500 |
17.0 |
320,000 |
42,700 |
20.0 |
Income tax rates for non-resident individuals
Employment income is taxed at a flat rate of 15% with no relief, or the resident tax rates whichever is higher.
Director’s fees and other income are taxed at a flat rate of 20% with no relief.
Generally, one would file a resident tax return if it results in a lower tax liability than that on the non-resident basis. However, if he expects to travel outside Singapore for business for at least 90 days during the Singapore employment after his return from the foreign assignment, he may benefit from the tax concession of time apportionment of income under the Not Ordinarily Resident (NOR) scheme. For information, he would qualify for NOR Scheme if he is resident for the year and non-resident for the 3 years preceding the year in which he is resident. Consequently, he may wish to elect to be assessed as non-resident during his foreign assignment period.
Q. Do I need to file a Singapore tax return?
A. You will need to file one as long as an income tax form/IRAS Pin mailer/SingPass invitation letter has been sent to you. This is regardless of your income level.
However, if you did not receive an income tax form/IRAS PIN mailer/SingPass invitation letter and your annual income in Singapore is $22,000 or more, you are also required to file an income tax return.
Q. Will I have to pay tax in respect of Singapore investment income earned while overseas?
A. Overseas employment income will not be taxable in Singapore. However if you have a Singapore employment, business trips outside Singapore are considered to be incidental to your Singapore employment and all income relating to your Singapore employment will be taxable in Singapore. Also, if you are employed outside Singapore on behalf of the Government of Singapore, the employment income is fully taxable in Singapore.
There are taxation implications surrounding gains from employee share and employee stock options. The implications do change on a case by case basis and should you hold employee shares and/or employee stock options at any time that you cease or commence Singapore income tax residency, you should seek specific advice.
All foreign-source income remitted to a resident individual (other than through a partnership) in Singapore is not taxable.
Q. I plan to sell my Singapore property while overseas. Are there any capital gains tax implications?
A. Singapore does not have Capital Gains Tax. Gains from the sale of a home are generally capital gains and not taxable. However, gains from trading in properties are taxable.
Q. Will I have to pay tax in respect of the employment income earned overseas?
A. Overseas employment income will not be taxable in Singapore. However if you have a Singapore employment, business trips outside Singapore are considered to be incidental to your Singapore employment and all income relating to your Singapore employment will be taxable in Singapore. Also, if you are employed outside Singapore on behalf of the Government of Singapore, the employment income is fully taxable in Singapore.
There are taxation implications surrounding gains from employee share and employee stock options. The implications do change on a case by case basis and should you hold employee shares and/or employee stock options at any time that you cease or commence Singapore income tax residency, you should seek specific advice.
All foreign-source income remitted to a resident individual (other than through a partnership) in Singapore is not taxable.
Q. What Social Security contributions will I pay when abroad?
A. Overseas employment income is not subject to CPF contributions.
Singapore has not entered into totalization agreements with any countries. Depending on the foreign country social security rules, you may be required to participate in the foreign country social security scheme.
