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.
Certificate of Residence for Individuals in Singapore
Eligibility to apply COR
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.
Can a foreigner apply for the COR in Singapore?
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:
Have a job offer or starting a business in Singapore;
Working in a managerial, specialised, or executive job;
Earning a fixed monthly salary of at least S$5,000 and possessing the requisite qualifications.
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:
Why do individuals apply for COR?
There are 2 main reasons for applying a COR in Singapore for individuals:
- Individuals apply for a COR to avoid full taxation from a foreign country, especially when one is earning income derived abroad.
- 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.