Singapore Fact-File Part 2:
Individual Business Domestic Taxation

2.1 Singapore Individual Business Tax Residence Rules

The rules for tax residency for individuals in business

An individual is generally assumed to be tax resident if they are present in Singapore for longer than 183 days during a year, or is present in Singapore in the year preceding the year of assessment.

However, there are two and three year administrative concessions in place (for foreign employees, generally). In the former instance, an individual residing or working in Singapore for a continuous 183 days over a 2 year period (except if they are a company director or public entertainer) will be deemed tax resident in Singapore for both years, even if they would not otherwise be deemed to be tax resident due to the start or end date of their stay.

Under the three year concession, a foreign individual residing or working in Singapore for three consecutive years can be tax resident for all three years, even if the number of days spent in Singapore is less than 183 in their departure and arrival years.

Benefits are also afforded under the ‘Not Ordinarily Resident’ scheme for certain expatriate workers, and with the primary benefit being tax exemption on the portion of Singapore employment income corresponding to time spent outside of Singapore on business trips, as long as the worker in question has been resident in Singapore for the two years prior to the year of assessment, spends at least 90 days out of Singapore on business, and has total Singapore employment income of SGD160,000.

Pre-assignment income remitted to Singapore is also exempted, as is the employer’s contribution to a non-mandatory overseas pension fund or social security scheme.

These benefits do not apply to directors’ fees, which are taxable in full, and as the scheme is primarily directed at not ordinarily resident employees, it is likely to be of limited interest to self-employed expatriates and business owners.

The Inland Revenue Authority of Singapore (IRAS) provides further information on the NOR scheme here: http://www.iras.gov.sg/irasHome/page03_ektid338.aspx .