Foreigners and Resident status
For income tax purposes, all foreigners who live and work in Singapore are classified as either residents or non-residents. A foreigner’s status as a tax resident, or lack thereof, will decide if the foreigner must pay any taxes and how much, if necessary.
A foreigner who has worked or lived in Singapore for a minimum of 183 days in a calendar year or continuously for three consecutive calendar years is regarded as a tax resident. Foreigners who have lived and worked in Singapore for at least 183 days spanning two consecutive tax years are also regarded as tax residents, even if they did not do so for at least 183 days in any single year. However, this does not apply to foreigners who are directors of a company, public entertainers, or professionals including foreign experts, speakers, trainers, and coaches, among others.
The income of a foreigner who is a tax resident is taxed at progressive resident rates. These progressive rates exempt any resident who earns less than S$20,000 in chargeable income per year from paying any income tax. Tax residents who earn more than this amount must pay income tax. The more income per year the resident earns, the more income tax the resident must pay. The maximum tax rate for people in this category is 22%. It is imposed on those who earn a minimum of S$320,000 in chargeable income per year. Foreigners who are tax residents may also claim any tax reliefs for which they are eligible.
Foreigners who are not tax residents but have worked and lived in Singapore for between 61 and 182 days of a year will have their income taxed at either a flat rate of 15% or the progressive resident tax rates. The rate which brings about the higher amount of the two will be used. As non-residents, these foreigners are not allowed to claim any tax reliefs.
Foreigners who have lived and worked in Singapore for 60 days of a year or less do not have to pay any income tax. However, this tax exemption does not apply to those who are directors of a company, public entertainers, or professionals. It also does not apply if the taxpayer’s absence from Singapore is incidental to the taxpayer’s employment in Singapore. Those for whom this is true are to be taxed in full in Singapore. Foreigners who have lived and worked in Singapore for 60 days of a year or less are not regarded as tax residents. As such, they are also disqualified from claiming tax reliefs.