Table of Contents
Introduction: The overseas Singaporean dilemma
You’ve just landed a fantastic role in London, Hong Kong, or Sydney, a two-year posting that promises incredible growth. The excitement of a new role, a new city, and a new lifestyle takes center stage. But as you start settling in, one question pops up in your mind: “Do I still need to pay tax in Singapore on my overseas salary?” Whether it’s depositing foreign salary into a Singapore bank account, flying back for occasional meetings, or receiving director’s fees from a local company while abroad, is IRAS going to tax this?
It’s a common scenario for many Singaporean professionals and entrepreneurs seizing opportunities abroad. You’re focused on making your mark globally, but the complexities of tax compliance can feel like a complex situation. Misunderstanding them can lead to unnecessary stress, or worse, costly penalties.
This guide simplifies the key taxation rules for Singaporeans and Permanent Residents (PRs) working overseas, clarifying exactly when your overseas income is (and isn’t) taxable by Singapore, so you can focus on your international career with peace of mind.
What determines your tax in Singapore
Where you work matters most. Singapore taxes employment income for work done in Singapore. If your duties are fully overseas, that salary is not taxed in Singapore, even if you pay it into a Singapore bank account.
Overseas income received in Singapore. For individuals, overseas income that you bring into Singapore is generally not taxable.
Short trips vs real postings. If your overseas work is just short trips as part of your Singapore role, your employer will usually report the full year income in Singapore. If you are on a real overseas posting that replaces your Singapore role, the overseas salary does not need to be reported as taxable in Singapore.
With the foundation clear, let’s look at recent rule changes that could affect how you plan your overseas career. The core principle of “where you work” remains, but several specific schemes and concessions that once benefited overseas Singaporeans have been phased out. Staying informed about these updates is key to avoiding compliance missteps.
- Non-resident election withdrawn from YA 2021. Singapore Citizens and Permanent Residents (SC, PR) working overseas can no longer elect to be taxed as non-residents. This did not change the core rule above.
- NOR scheme ended. The Not Ordinarily Resident (NOR) scheme ended after YA 2024.
- Non-resident rates. Employment income is taxed at 15% or resident rates, whichever is higher. Director’s fees and most other incomes are 24% for non-residents.
With these principles and updates in mind, let’s ground them in a few straightforward, real-world examples to see how they play out.
- All workdays overseas: You work the whole year outside Singapore. Outcome: Salary not taxable in Singapore. Paying it into a Singapore bank account does not change this.
- Mostly overseas, some days in Singapore: You spend most days overseas but have some workdays in Singapore. Outcome: Only the part of your pay for Singapore workdays is taxed in Singapore. Keep a simple workday log.
- Director’s fees from a Singapore company while overseas: Still taxable in Singapore. If you are a non-resident, the company usually withholds 24% when paying the fees.
These scenarios cover the basics, but modern compensation structures and work arrangements often introduce more complexity. It’s easy to fall into a few common traps if you’re not careful.
More about the tax residency in Singapore
Tax residency in Singapore refers to the status of an individual or a company for tax purposes. Being a tax resident in Singapore can have significant benefits such as access to tax incentives, a lower tax rate, and ease of doing business.
Criteria for Tax Residency in Singapore
You are a tax resident for a particular Year of Assessment if you are a:
- Singapore Citizen or Singapore Permanent Resident (SPR) who normally resides in Singapore except for temporary absences; or
- Foreigner who has stayed/worked in Singapore:
- for at least 183 days in the previous calendar year; or
- continuously for 3 consecutive years; or
- Foreigner who has worked in Singapore for a continuous period straddling 2 calendar years and your total period of stay* is at least 183 days. This applies to foreign employees who entered Singapore but excludes directors of a company, public entertainers or professionals.
- * including your physical presence immediately before and after your employment.
Advantages of Being a Tax Resident in Singapore
Being a tax resident in Singapore has several advantages:
- Capital gains tax exemption – Singapore does not have a capital gains tax, which means that tax residents are not taxed on gains from the sale of investments, such as stocks or property.
- Foreign-sourced income exemption – Singapore provides tax exemption for foreign-sourced income received by tax residents in Singapore, subject to certain conditions.
- Lower tax rate – Singapore has a progressive tax system, and the tax rates for residents are lower than those for non-residents.
- Ease of doing business – Tax residents in Singapore enjoy several benefits such as lower corporate tax rates, access to tax treaties, and a business-friendly environment.
How to apply for a Certificate of Residence
All Certificate of Residence (COR) applications have to be filed via mytax.iras.gov.sg, except for specific circumstances.
You can apply for a COR via mytax.iras.gov.sg for:
- The current calendar year
- Up to 4 back calendar years
For example, in the calendar year 2021, the company may apply for a COR for the calendar years 2020 to 2017. The company may also apply for a COR for 1 advance calendar year starting from Oct of the current calendar year.
Common traps
Navigating the rules can be tricky, and a few specific areas often cause confusion. One frequent pitfall is assuming all overseas work is exempt. If your international travel is an integral part of your Singaporean role, your income may still be fully taxable here.
- Overseas work that is part of a Singapore role. Short overseas trips that support your Singapore job can still be fully taxable in Singapore.
- ESOP or share awards (ESOW). If the grant was made while you were working in Singapore, gains can be taxable in Singapore when you exercise or when they vest, even if you are overseas by then. For non-citizens, a deemed exercise rule can bring tax forward when you leave Singapore.
- Short visits still count. Any services done in Singapore are taxable here unless a specific exemption applies.
- COVID concessions ended. Temporary COVID guidance no longer applies.
Double taxation relief
If both Singapore and another country tax the same income, you can usually claim relief under a Double Tax Agreement (DTA). The credit typically applies to the portion taxed in Singapore for workdays performed locally. Always check the treaty details between Singapore and your host country.
What records to keep
Proper documentation is your best defense against tax complications. To ensure you can substantiate your tax position, maintain the following records:
- Workday and travel logs (itineraries, calendars, details of travel allowances and per diem, etc.)
- Payroll records (to split Singapore workdays from overseas workdays)
- ESOP or ESOW schedules (grant, vest, exercise dates)
Keeping these documents in order is not just good practice, it’s essential if you need to manage situations where income might be taxed by two different countries.
Conclusion: Navigating Your Global Career with Confidence
Embarking on an international career is a significant step, and understanding your tax obligations is fundamental to making it a success. The key takeaway is that Singapore’s tax system is based on the location of your work. Income from a genuine overseas posting isn’t taxed, but any work performed in Singapore, director’s fees, or gains from Singapore-linked stock options remain on IRAS’s radar. Keeping meticulous records isn’t just administrative work; it’s the bedrock of a compliant and stress-free financial life abroad.
As your career becomes more global, your financial situation inevitably becomes more complex. While this guide provides a strong foundation, personalized circumstances often require expert guidance. At MBiA, we specialize in simplifying the complexities of expatriate and overseas worker taxation for Singaporean professionals just like you. Whether you’re planning a short assignment abroad or building a long-term career overseas, we ensure you stay compliant, so you can focus on what you do best, thriving in your international career. Reach out today for a consultation.
Key rates and terms (2025)
- Resident vs non-resident: Status affects rates and reliefs. It does not decide if overseas salary is taxable.
- Non-resident rates: Employment income at 15% or resident rates (higher of the two). Director’s fees 24%.
FAQ
Q: Is overseas salary taxable in Singapore if I bank it here?
A: Usually no for individuals. IRAS says overseas income received in Singapore is generally not taxable.
Q: Do some workdays in Singapore make part of my salary taxable?
A: Yes. Only the pay for workdays in Singapore is taxed here.
Q: Does the NOR scheme still help?
A: No. It ended after YA 2024.
Q: Can SC or PR employees still elect non-resident treatment while overseas?
A: No. The concession was withdrawn from YA 2021.
Q: Are stock options or share awards taxable after I move overseas?
A: They can be, if the grant was tied to Singapore employment. Gains may be taxed in Singapore when they vest or are exercised.
