I am working for a foreign employer

Foreign employers

Foreign employers include representative offices registered with 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.  Such services include attending training, operating machinery, site visits, assignments, conducting and attending meetings in Singapore required/assigned by your overseas employer.

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.

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.

(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.
• Payment that you received when your overseas employer sent you to Singapore for training.

Your employer is required to report your employment income in the Form IR8A yearly.  You should declare this income in your income tax return during the annual tax filing cycle from 1 Mar to 18 Apr.

In the year that your services rendered in Singapore ceased, your overseas employer should file Form IR21, on your behalf, to report your employment income up to the date that your services in Singapore ceased.

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.

Tax treatment for employees travelling into Singapore on or after 1 January 2016 for business purposes

1. The following receipts for business trips 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 2023 is $140 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.

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 (18 Apr if you e-File your tax return) 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:-

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 (DOC, 48KB) 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 LOG issued by a Representative Office in Singapore is not acceptable as it is not regarded as a limited company in Singapore.
• An established limited company in Singapore refers to a company
  • that is registered in Singapore for at least 3 years;
  • has a paid up capital of at least $25,000* and
  • must not have any record of the following for the 1 year immediately before submitting the LOG:
    • Late filing of tax returns; or
    • Late payment of taxes
  * Company paid up capital information is available in the business profile obtainable from ACRA.  You must submit the company's business profile together with the LOG.
• For a LOG issued by an established limited company in Singapore, please email the LOG to us.
• For a guarantee issued by a bank, that is, a Banker's guarantee, the original Banker's guarantee is to be delivered in person to:

Inland Revenue Authority of Singapore

55 Newton Road

Revenue House

Singapore 307987                                                                                                                                        

• The LOG or Banker's Guarantee has to be submitted to IRAS on a yearly basis.
• In the absence of the LOG or Banker's 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.
• The LOG has to be signed by an authorized personnel of the Company.  If you are an authorized personnel and are required to forward the LOG to cover your estimated tax, the LOG must be signed by another authorised personnel.
• A LOG that is issued by a Company where you are the Director is not acceptable.

Waiver of the requirement to provide Letter of Guarantee (LOG)

The requirement to provide the Letter of Guarantee can be waived if you satisfy any of the following conditions:

• Your salary cost is fully borne by the Singapore entity, i.e. the salary cost is being charged to the Profit & Loss Account of the Singapore entity; or
• Your Singapore income tax is fully borne by the Singapore entity, i.e. full tax-on-tax is computed on your Singapore employment income by your employer.  Please see the example on full tax-on-tax (Example 1) (PDF, 682KB).

For the avoidance of doubt, your Singapore income tax is not considered to be fully borne by your employer if you are tax equalized in Singapore.

You should provide a letter from an authorized personnel of the Singapore entity (other than yourself if you are also the authorized personnel) to confirm that your salary cost and / or Singapore income tax is (are) fully borne by them.

Tax clearance obligations

Your employer should complete the Form IR21 at least one month before you cease employment or leave Singapore. Find out more about tax clearance.

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:-

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.

How to reduce your tax liability

1.  Area Representative tax treatment

If you work for a foreign employer and 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 (BIK) provided in Singapore are fully taxable.

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

Qualifying as an Area Representative

To qualify as an Area Representative, you must satisfy these four criteria below: Up to YA 2023

• You must be employed by a non-resident employer;

• You are based in Singapore for geographical convenience;

• You are required to travel outside of Singapore in the course of your duties; and

• Your remuneration is paid by your foreign employer and not charged directly or indirectly to the accounts of a permanent establishment in Singapore.

A permanent establishment refers to a fixed place where a business is wholly or partly carried on, e.g. a place of management, a branch, an office, a factory etc.

With effect from YA 2024

The rationale for the area representative (AR) tax treatment is based on the territorial basis of taxation as ARs are considered as having an overseas employment.

To qualify as an Area Representative, you must satisfy these four criteria below:

• You must be employed by a non-resident employer;

• You are based in Singapore for geographical convenience;

• You perform services primarily outside Singapore; and

• Your remuneration is paid by your foreign employer and not charged directly or indirectly to the accounts of a permanent establishment in Singapore.

A permanent establishment refers to a fixed place where a business is wholly or partly carried on, e.g. a place of management, a branch, an office, a factory etc.

Time apportionment of income

Your employment income will be prorated based on the duration of your physical presence in Singapore during the calendar year:

Total number of days attributable to work in Singapore in a calendar year is 61-182 days

Total number of days attributable to work in Singapore in a calendar year is 183 days or more

Your stay covers three continuous years or more

Applying for Area Representative status and concession

Submit the following documents to IRAS together with your annual tax return by 15 April of the Year of Assessment in which you qualify for the scheme:

1. Application Form for Area Representative Status (Up to YA 2023) (DOC, 205KB)
2. Application Form for Area Representative Status (wef YA 2024) (DOC, 205KB)
   
3. Employment contract or job description under the foreign employer's letterhead and signed by authorised personnel.
4. Travel schedule using Area Representative Travel Calculator (XLS, 41KB)

Subsequent years

If your Area Representative status is approved and your employment arrangement remains unchanged the following year, you need not apply for the status every year. However, you are still required to submit the Area Representative Travel Calculator (XLS, 41KB) by 15 Apr (18 Apr if you e-File your tax return) each year so as to enjoy the tax concession.

However, if there is a change in your employment arrangement (e.g. your job scope, the entity which bears your remuneration cost), please inform us to enable us to review your eligibility for the Area Representative status.

2. Exemption under Avoidance of Double Taxation Agreement (DTA)

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

The DTA article for Dependent Personal Services may provide for exemption from Singapore income tax if certain conditions are met. Please use our DTA Calculator - Dependent Services (XLS, 272KB) to check if you are eligible for the tax exemption.

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

If you anticipate a refund, please register for PayNow FIN for faster processing.

Common scenarios

FAQs