Who can Apply for Certificate of Residence (COR) in Singapore?

A Certificate of Residence (COR) in Singapore is a letter stating that you are a tax resident in Singapore for the purpose of claiming benefits under the Avoidance of Double Tax Agreements (DTAs). In Singapore, both individuals and companies are eligible to apply for certificates of residence.

Singapore tax residence certificates are issued by the Inland Revenue Authority of Singapore (IRAS). Every taxpayer in Singapore is regarded as either a tax resident or non-resident.

For the IRAS to consider an individual to be a Singapore tax resident, the individual must either have lived or worked in Singapore for at least 183 days in the calendar year preceding the year of assessment (YA).

Even if this condition is not fulfilled, individuals will nevertheless be regarded as Singapore tax residents. If at least one of these conditions below is fulfilled, the individual may make a COR application.

However, if the individual is a foreigner, there is another condition to be fulfilled that is to obtain a working visa to work and stay in Singapore. With Employment Pass is issued by the Ministry of Manpower to those who meet the following criteria:

With a visa, you can stay and work in Singapore for more than 183 days therefore qualify you to apply for COR. As mentioned above, due to work or other commitments that whereby you cannot be present for more than 183 days, you can still apply for the COR if you can prove that you have relationship tie with Singapore such as:

There are 2 main reasons for applying a COR in Singapore for individuals:

1. Individuals apply for a COR to avoid full taxation from a foreign country, especially when one is earning income derived abroad.
2. Another reason that drives individuals to apply for COR is because Singapore has signed Avoidance of Double Taxation Agreements (DTAs) with many countries.

A DTA states the taxing rights between Singapore its treaty partner on diverse types of income arising from any economic activity between the two countries. These agreements also support tax reductions on specific types of income.

Thus, a Singapore tax resident will benefit from these exemptions or reductions. As long as the individual fulfils all the necessary criteria to obtain the certificate of residence, the individual will receive it after applying for the certificate of residence to the IRAS and will then be able to submit it to the foreign tax authority. By submitting the certificate to the foreign tax authority, the individual can prove tax resident status and will be able to claim the tax benefits.

The converse of the above is also true. If a foreign individual is a tax resident of a country with which Singapore has a DTA providing for Singapore income tax exemption on Dependent Personal Services rendered in Singapore, the individual could potentially apply for a tax exemption. To claim the tax exemption, the individual would have to submit a certificate of residence that has been certified by the individual’s home country’s tax authority to the IRAS.

Companies may also apply for Singapore tax certificates of residence. Just like individuals, the IRAS also issues certificates of residence to companies to state that a particular company is a Singapore tax resident.

Tax substance is commonly measure by tax residency. A company is tax resident in Singapore when the control and management of the company is exercised in Singapore.

How can you achieve tax substance?

If you need to obtain tax residency for COR for your company, Paul Hype Page solutions:

Obtain an employment pass to live and work in Singapore. This implies that control and management is in Singapore which directly contributes to local tax residency, or that an employee is located in Singapore.

Our Shared Services Solution enable your business moving by employing physical local staff for multiple roles as below. Having physical presence in Singapore will contribute to your business substance and meet current requirement from the government

When the IRAS issues a Singapore certificate of residence to a company, it takes the following factors into account before doing so:

A company requesting a certificate of residence must provide its full name, registration number, and YA for which the certificate is required to receive the certificate. To receive a certificate, the company’s directors must also live and keep the company’s books and records in Singapore.

The company should be able to supply supporting documents to prove that it exercises its control and management in Singapore. The term “Control and management” is defined as the making of decisions related to the company’s strategic matters or policies.

Examples of such documents include the following:

In Singapore, a company may use a certificate of residence to

Singapore branches of a foreign company that has its headquarters abroad are not regarded as residents and thus normally cannot receive a certificate of residence or the benefits it confers. The same is true of foreign-owned investment holding companies. These companies are defined as those which have at least 50% of shares held by foreign companies and shareholders.

They are not regarded as residents because these companies normally act on the instructions of foreign parent companies or shareholders. For example, a holding company owned by a non-Singapore entity receiving only foreign-sourced income will not be a Singapore tax resident.

Despite this, IRAS may issue a certificate of residence if the company can prove that the control and management of the company’s business is exercised in Singapore, as well as that the company has valid reasons for setting up an office here. The company must also satisfy one of the following conditions to qualify for a certificate of residence:

Similarly, non-Singapore incorporated companies are also not regarded as residents because they are managed and controlled by their foreign parent companies. However, the IRAS may issue a certificate of residence to foreign incorporated companies and its Singapore branches if the company can prove that the control and management of the company’s business is exercised in Singapore, as well as that the company has valid reasons for setting up an office there. The IRAS may request additional information about the company at any time.

Recently, the Monetary Authority of Singapore confirmed that a Variable Capital Company (VCC) can also benefit from a certificate of residence. A VCC which is a Singapore tax resident can apply for a certificate of residence. After the certificate is approved, it will be issued in the VCC’s name and will give the names of all the VCC’s sub-funds receiving the same income from the same source jurisdiction.

A Singapore tax certificate of residence is an extremely important and powerful document for any Singapore tax resident. Having one opens many doors and allows its bearer to benefit from several tax benefits.

It always a good idea to apply for the Singapore COR as it will come in handy now or in future especially for company or individual have overseas business transactions and foreign source income as an investment or operational entity.