Special Cases on Tax Resident Status
Foreigners who are company directors in Singapore are not regarded as tax residents unless they have an employment pass, lived, or worked in Singapore for at least 183 days of the previous YA. A non-resident director’s remuneration, which may include director’s fees and salary, related to a tax resident company in Singapore is subject to a withholding tax rate of 22%. Tax resident companies in Singapore are those whose control and management is exercised in Singapore. “Control and management” refers to the board of directors’ meetings. This tax payment is mandatory regardless of the actual location of board meetings or the director’s own physical location while working. Should the director receive profits from Exercise of Stock Options (ESOP) or Vesting of Stock Awards (ESOW), the director must report these gains and will then receive a tax bill detailing how much tax is to be paid. The director’s remuneration as a board director valued at a minimum of S$10,000 is subject to a withholding tax at a 22% rate if the director is physically present in Singapore for fewer than 183 days of a YA. If the director’s remuneration is at least S$15,000, it is subject to a 22% withholding tax rate if the director has been in Singapore for fewer than 183 days of the calendar year at the time that the remuneration is declared.
There are also two related instances in which withholding tax does not apply. If the director has been in Singapore for more than 183 days of the calendar year at the time that the remuneration is declared or if the director is a managing director who earns a minimum of S$60,000 per year, no withholding tax must be paid.
Non-resident Public Entertainers
Non-resident public entertainers (NRPEs) are also not subject to the usual tax laws for non-residents. NRPEs are defined as any of the following: stage, radio, or television performers; musicians; or athletes who are in Singapore for less than 183 days of a calendar year. NRPEs are subject to a withholding tax of 15% of their taxable income earned from services performed in Singapore. However, this tax rate is reduced to 10% should the income for the services performed in Singapore be due and payable to the NRPE during the period spanning February 22, 2010, to March 31, 2022.
Non-resident professionals (NRPs) also operate under a separate set of tax rates. NRPs include consultants, coaches, trainers, foreign experts, speakers, individuals who operate through foreign firms, and academics who are in Singapore for fewer than 183 days of a calendar year. The income earned by NRPs is subject to either a withholding tax at 15% of the gross income or fees payable to the NRP or the non-resident rate of 22% if the NRP prefers to be taxed based on net income.