Topic 6 - Individual

CHAPTER 6 SIT Internal TAXATION IN SINGAPORE
TOPIC 6
Taxation of Individuals
Outline
 Basis of Assessment
 Tax Residence and Tax Rates for Individuals
 Taxability of Employment Income
 Benefits-in-Kind Administrative Concessions
 Personal Reliefs and Deductions
 Not-Ordinarily-Resident Scheme (NOR) –
Maybe covered in Partnership lecture
Basis of Assessment for Individuals

Territorial basis of assessment
• Income sourced in Singapore taxable to the
individual. Place of payment or receipt of
income is irrelevant.
• Overseas income are not taxable even when
. remitted to Singapore by the individual. This
applies to:
• Income remitted by resident.
• Income remitted by non-resident
Tax Residence
Who is considered a Tax Resident?
Section 2 of SITA
“a person who, in the year preceding the Y/A, (1)
resides in S’pore except for temporary absences
therefrom as may be reasonable and not
inconsistent with a claim by such person to be
resident in Singapore, and includes a person who
is (2) physically present or who exercises
employment (other than as a director of a
company) in Singapore for 183 days or more
during the year preceding the Y/A.”
Tax Residence
Qualitative Test
• A Singaporean is a tax resident in Singapore if
he normally resides in Singapore except for
temporary absences that are consistent
with the claim to be a resident.
Qualitative Test
• Citizenship / PR status
• Family and social ties
• Financial ties
• Usual place of residence
• Type of accommodation
• Reasons for absence from Singapore
• Frequency, regularity and duration of visits to Singapore
• Intent of return to Singapore
Tax Residence
Quantitative Test
• A foreigner will be regarded as tax resident in
Singapore if he was physically present or
exercised an employment in Singapore for 183
days or more during the year preceding the
Year of Assessment.
Tax Residence
Administrative Concession
Period of stay (inclusive of
employment) in Singapore
Work for a continuous period Resident in both
straddling two calendar years years
and the total period of stay is at
least 183 days
Work or stay for 3 consecutive Residents for all 3
years years
Tax Residence- 2 years concession

(Adapted from IRAS)
Arrived in Singapore on 1 Nov 2019 and started work from 18
Nov 2019. Ceased employment on 1 April 2020 and left
Singapore on 3 May 2020
Period of Stay
Year of Assessment
(Inclusive of Work) in Tax Residency Status
Singapore
1 Nov 2019 to 31 Dec

2020 Tax Resident
2019 (61 days)
1 Jan 2020 to 3 May

2021 Tax Resident
2020 (123 days)
Total Number of Days

in Singapore: 184 days
Tax Residence- 3 years concession

(Adapted from IRAS)
Stayed or worked in Singapore from 1 Sept 2018 to 31 March
2020.
Period of Stay
Year of Assessment (Inclusive of Work) in Tax Residency Status
Singapore
1 Sept 2018 to 31 Dec

2019 Tax Resident
2018 (122 days)
1 Jan 2019 to 31 Dec

2020 Tax Resident
2019 (365 days)
1 Jan 2020 to 31 March

2021 Tax Resident
2020 (90 days)
Tax Residence
Foreigners in Singapore with < 183 days (short-term)
• 60 days or less - not taxable (not applicable for directors

and public entertainers) – S13(6) of SITA.
• Between 61 days to 182 days – maybe taxable (depends
if tax exemption is available under the tax treaties
between Singapore and his home country)
Tax Residents Vs Non-Residents

Resident Non-Resident
Taxable
Income sourced in
Taxable (except short term
S’pore
empt.)
Overseas income
NT NT
remitted
15% or higher of
resident rates on
Tax Rates Progressive employment income;
22% (wef YA 2017) on
other income
Personal
Available NA
Reliefs/Rebates
Tax treaty benefits Available NA

Tax rates for Residents (YA 2017 onwards)
Chargeable Income Income Tax Rate (%) Gross Tax Payable ($)
First $20,000 0 0
Next $10,000 2 200
First $30,000 - 200

Next $10,000 3.50 350
First $40,000 - 550

Next $40,000 7 2,800
First $80,000 - 3,350

Next $40,000 11.5 4,600
First $120,000 - 7,950

Next $ 40,000 15 6,000
First $160,000 - 13,950

Next $ 40,000 18 7,200
First $200,000 - 21,150

Next $40,000 19 7,600
First $240,000 - 28,750

Next $40,000 19.5 7,800
First $280,000 - 36,550

Next $40,000 20 8,000
First $320,000 - 44,550

Above $320,000 22
Example of Personal Tax Computation of Resident Individual

YA 2019 $
Employment income 40,000
Net rental income 1,000
Statutory Income 41,000
Less: Approved donation ($80 x 2.5 times) (200)
Assessable Income 40,800
Less: Total personal reliefs (12,500)
Chargeable Income 28,300
Tax on 1st $20,000 Exempt

Tax on next $8,300 @ 2% 166.00
166.00
Less: Tax rebate (50%) * (83.00)
83.00
• Tax rebate for YA 2019 – 50%, capped at $200 (Budget 2019)

• No tax rebate for YA 2020
Taxation of Employment Income

Section 10(1)(b) of the Income Tax Act
“Income tax shall, subject to the provisions of this Act, be payable
... upon the income of any person accruing in or derived from
Singapore or received in Singapore from outside Singapore in
respect of :
(b) gains or profits from any employment”
Section 10(2) of Income Tax Act

“For the purposes of subsection (1) (b), “gains or profits from any
employment” means –
(a) any wages, salary, leave pay, fee, commission, bonus, gratuity,
perquisite or allowance... paid or granted in respect of the
employment whether in money or otherwise”

• Salary
• Bonus : Contractual vs Non-Contractual
• Director’s fees: Taxable upon….
• Commission
• Allowances
• Retrenchment and retirement benefits
• Contributions to overseas pension/provident funds
• Benefits-in-kind
• Excess or voluntary CPF contributions
• Stock options and share ownership plans

Salary
Includes the following:
• Leave pay
• Overtime pay
• Remuneration paid by overseas employers to employees
performing personal services in Singapore
Note: Taxable in the year, notwithstanding that it may be paid
in the following year, or paid outside Singapore.

Bonus
Assessable in the year in which it becomes due and payable, not when it is
paid:
Contractual bonus
• payable in accordance with the terms of a contract of service or a bonus
plan adopted by an employer and cannot be rescinded by the employer
without legal consequences (e.g. 13th month annual wage supplement)
• taxable in the year the employee is entitled to the bonus, usually the year
in which the employee renders his services in earning the bonus.
• If a bonus is contingent on conditions to be met in future, then an
employee is entitled to such bonus when the conditions are met. But if
bonus is paid in advance before conditions are met, then it is taxable at
time of payment, subject to adjustments if conditions are not met later.

Contractual bonus
• You are given a contractual bonus (e.g. 13th-month bonus) in the year
ended 31 Dec 2019 as stated in your employment contract. You received the
bonus in Feb 2020.
• This contractual bonus will be taxable in YA 2020 because the bonus was
paid for your services in 2019.

Non-Contractual bonus
• Not payable in accordance with the terms of a contract of
service or a bonus plan adopted by an employer and can
be rescinded by the employer at any time prior to the
actual payment of the bonus without legal consequences
• taxable based on the date on which the bonus is
declared payable / paid.
Employer A informs his employees on 1 Dec 2019 of his decision to pay non-
contractual bonuses for the year ending 31 Dec 2019 on 1 June 2020.
The employees become entitled to such non-contractual bonuses on 1 June
2020 when the bonuses are paid. The employees will be taxed on their bonus in
YA 2021.

Director’s Fee
Treated as income of the year in which the director

becomes entitled to the fee, and this generally happens
when the fee is voted and approved at the company’s AGM.
e.g. Director’s fee voted and approved by a company at its
AGM on 30 June 2019 for services rendered for the
accounting year ended 31 December 2018 will be taxable in
the YA 2020.

Allowances
Recurring, fixed cash payment,
Include the following:
• Transport / travelling
• Entertainment
• Overtime/Shift/night duty
• Meals*
• Clothing / Laundry
• Housing
• Cost of living allowances (COLA)
• Per diem allowances
• Mobile phone
* Overtime meal allowance and reimbursement are not taxable provided it is for working beyond official working hours on
an ad hoc basis; and available to all staff or applies to staff at the lower level

Per diem allowances
• Refer to daily allowances given to employees on
overseas trips (e.g. conference and training) for business
purpose.
• Given to cover living expenses like cost of meals,
transport expenses & other incidental expenses such as
laundry.
• Excludes air tickets, overseas accommodation, airport
transfers, travelling and entertainment expenses for
business purposes.
• Fully taxable unless employer can prove that the amount
is subsistence in nature

Revised Procedure:
• IRAS started to publish acceptable rates every year
• Only amounts in excess of acceptable rate is taxable.
• Employer only needs to report in Form IR8A for amounts in
excess of acceptable rate.
E.g.
Acceptable rate for Australia is $116 for the year 2021. So if a company’s
rate is $110, employee is not taxable and company need not declare in
Form IR8A. If a company’s rate is $120, employee is taxable on $4 and
company needs to declare this $4 benefit in the employee’s Form IR8A.
*https://www.iras.gov.sg/irashome/Businesses/Employers/Tax-Treatment-of-Employee-Remuneration/Per-Diem-Allowance/Acceptable-Rates-
for-Per-Diem-Allowance/

Retrenchment and retirement benefits
Retrenchment payments to compensate for loss of
employment are not taxable; treated as capital receipts.
However, payments for salary in-lieu of notice and gratuity
for past services are taxable.

Employer’s Contributions to overseas pension/provident
funds
Taxable as part of employee’s income.
Need to report the following:
• Voluntary contributions by employers to such funds or social security
schemes for employees working outside home country.
• Contributions to schemes not regulated by government (non-
mandatory).
• Contributions to such funds or social security schemes, which are in
addition to contributions to social security schemes operated by
government.
Not taxable by concession if employer is not claiming

deduction for contributions to a national or government
pension scheme and participation is mandatory. NA for
incentive companies.

Excess/Voluntary CPF contributions by employer
The following are taxable:
• Contributions in excess of compulsory contributions under CPF Act.
• Contributions exceeding rates applicable on monthly cap as well as
overall annual income cap of 17 months of ordinary wage ceiling.
• Contributions that are voluntary (i.e. not compulsory) under the CPF
Act, e.g. foreign employees.
• Need to complete Form IR8S.
For these contributions, employee cannot claim personal

relief and employer cannot claim tax deduction.
Mandatory CPF = $6,000 X 12 (OW) and $6,000 X 5 (AW) @ 17% for
employer and 20% for employee. The contribution rates are different
for other age groups

Stock Options and Share Ownership Plans
• Gains and profits arising from Employee Share Options (ESOP) and other forms of
Employee Share Ownership (ESOW) are subject to tax.
• ESOP plans give the employee the rights to purchase shares in the company at a
specific pre-determined price within a time frame. An employee who is granted share
options by an employer will be taxed on any gains or profits arising from the exercise of
the share option.
• ESOW plans allow an employee of a company to own or purchase shares in the

company or in its parent company. They include share awards and other similar forms of
employee share purchase plans (excluding phantom shares and share appreciation
rights). An employee who is granted ESOW by the employer is subject to tax on any
gains or profits when the ESOW plan vests on the employee.

• Taxable amount is the OMV of the shares at the time of
exercise/awarded/vesting less amount paid by employee, if any.
• Any gains derived from employees arising from the exercise of
share options are taxable at the time the options are exercised.
• Share awards taxable at the time of award, or at the time of
vesting, if a vesting period is imposed.
• For stock options and share awards where there is a
moratorium imposed on the acquired shares, gains are taxable
when the moratorium is lifted, and taxable amount is the OMV
of shares on date moratorium is lifted less amount paid by
employee.

• Stock options and share awards granted while the
employer is exercising employment in Singapore are fully
taxable, regardless of where the options are exercised or
the shares are vested.

Deemed Exercise Rule:
• Applies to departing expatriates who are neither
Singapore citizens nor PRs.
• Applies to any stock options and share awards granted
in respect of Singapore employment.
• Expatriate is deemed to have derived a final gain in
respect of all unexercised stock options and/or
unvested/restricted share awards at one month prior to
the date of cessation of employment.

Deemed Exercise Rule:
• Taxable gain is OMV of shares as at 1 month before
cessation of employment or date of grant of the stock
options and share awards, whichever later less exercise
price or amount paid by employee.
• Employer responsible for providing details of final gains
under this rule.
• Employee can still apply for reassessment of his tax liability
within 4 years following the assessment year in which the
deemed exercise rule is applied, if actual gain is lower.
• Alternative to deemed exercise rule – tracking option

Tax Deferment Scheme
Qualified Employee Equity-based Remuneration Scheme (Qualified EEBR Scheme)
• Payment of tax on gains arising from stock options/shares can be deferred for up to five
years. The deferred tax is subject to an interest charge.
Equity Remuneration Incentive Schemes (ERIS)
• ERIS (Start-ups)
• tax exemption of 75% of the gains arising from ESOP or ESOW plans.
• ERIS (SMEs)
• tax exemption of 50% of the gains arising from ESOP or ESOW plans.
• ERIS (all corporations)
• full exemption on the first $2,000 gains, and 25% exemption of the remaining amount
of gains from ESOP or ESOW plans.
• Tax exemption is available for each YA over a period of ten years, subject to qualifying
criteria and the accumulative gains on which the tax exemption applies are capped at $1m
or $10m (for Start-ups and SMEs) and the gains must be derived on or before 31 Dec
2023

Common Elements of Taxable Benefits-in-kind
• Housing accommodation (including furniture & fittings)
• Hotel accommodation
• Home leave passages
• Motor car benefits
• Insurance premiums paid by employer
• Medical benefits
• Tax borne by employer
• School fees paid by employer

Housing accommodation (ex Hotel)
• taxable value is the full rental paid by employer less rent borne by
employee, if any.
• If the employer’s rental value is not available, then Annual value
of the property less rent paid by the employee will be used
• rent for furniture and fittings included in the total annual rent paid by the
employer.
• Otherwise, furniture and fittings in a residence or serviced apartment
are valued as:
• 40% of the AV if the property is partially furnished; or
• 50% of the AV if the property is fully furnished.
• Partially furnished - Only fittings (e.g. lighting, air- conditioners/ceiling
fans, water-heater) are provided.
• Fully furnished - Both fittings and furniture / household appliances are
provided.

Hotel accommodation
Taxable amount is the actual costs incurred by the employer
for the hotel stay, less any amount paid by employee.

Home Leave Passage
• All home leave passages would be taxable in full

• Leave passages provided to a foreigner and his
family on taking up his first appointment in
Singapore, and on their return upon termination of
employment are not taxable

Interest Subsidy
• Normally regarded as taxable benefit.
• However, it is possible to seek exemption from IRAS if
all the following conditions are satisfied:
- Company provides loan directly to the employee.
- Scheme is generally available to all staff.
- Employee does not have substantial shareholdings,
control or influence over the company

Club Benefits
Transfer fee/Entrance fee

If the club membership is a corporate membership, the
transfer fee or entrance fee will not be assessable on the
employee as the employee does not have title to the
membership and has no right to dispose of or transfer the
membership as he pleases.
If the club membership is granted to the employee as a

personal membership, the full entrance fee paid by the
employer is a taxable benefit.

Motor Car Benefits
With effect from YA 2020….
Taxable value of car benefit will be computed as follow:-
New Car: 3/7 x [(Car Cost – A)/10 + B]
Leased car: 3/7 x (both rental cost + actual running and
maintenance costs incurred by the employer)
where:
A - refers to the amount of Preferential Additional Registration Fee (PARF) rebate to be
granted when the car is de-registered at the age of above 9 but not exceeding 10 years.
B - refers to the actual running and maintenance costs incurred by the employer (including
reimbursements made to the employee by the employer), e.g. road tax, petrol, car park
charge, ERP charge, car insurance, repairs and maintenance, if any. Some expenses may
be paid in advance for the year, e.g. car insurance and road tax. To ease the compliance
burden of the employer, IRAS is prepared to accept the taxable car benefit computed based
on the actual running costs incurred by the employer in the calendar year

Insurance premiums
• Personal insurance policy, employee is the policyholder -
Taxable
• Group medical policy available to all employees – Not
Taxable
• Group insurance policy, employee is entitled to payout –
Taxable on premiums; subsequent payout not taxable
• Group insurance policy, employee is not entitled to payout
– Not Taxable on premiums
• Work injury – Not Taxable

Medical benefits
Reimbursement of medical and dental care/treatment to employees, their
spouse and children – not taxable if available to all employees. Taxable if
provided to other dependents of the employees.
Medical benefits that are available to employees based on

gender/age/employee’s grade - Not taxable, if:
• There is a basic form of medical benefits (e.g. outpatient treatment
and hospitalisation) which is made available to all employees
regardless of gender, age or grade etc; and
• The benefit differentiated by gender, age or employee's grade is part
of the organisational compensation and benefits structure/policy; and
• There are genuine commercial reasons for such variation (e.g. to
attract or retain staff).

Tax borne by Employer
Income tax of the employee which is borne by the employer is
assessable as a gain from employment.
Fixed tax allowance
Full allowance taxable, regardless of whether your actual tax is more or
less.
Tax borne by employer
If your tax is partially or fully borne by your employer, a tax on tax
calculation will be made to determine the amount of tax to be paid by
your employer on your behalf.
Common types of tax arrangements
• Tax equalization
• Tax protection
Benefits-in-Kind under Administrative

Concessions
• All benefits-in-kind (BIKs) derived by employees in

respect of employment are generally taxable, unless
specifically exempted from income tax or covered by an
existing administrative concession.
• All BIKs are to be reported in Form IR8A / IR 21.
• Refer to IRAS website for the latest updated list of BIKs
that are granted administrative concession or exempt
from income tax.
Benefits-in-Kind under Administrative

Concessions
• Benefits that foster goodwill among staff
• Benefits relating to health of employee (free or
subsidised)
• Benefits given to promote creativity and innovation
• Benefits given to encourage upgrading of skills and
knowledge building.
• Cash or non-cash gifts < SGD 200
• Overtime transport and meal allowance &
reimbursement
subject to conditions
Personal Reliefs & Deductions

Types of Personal Reliefs
• Earned income relief

• Wife/spouse/handicapped spouse relief
• Child relief
• Parents/handicapped parents/grandparent caregiver relief
• Handicapped brothers or sisters relief
• CPF/life insurance relief
• Course fees relief
• Relief for foreign maid levy
• NSmen (self/wife/parent) relief
• Relief for CPF cash top-up
• Relief for SRS Contributions

Earned Income Relief (EIR)
Given if taxpayer receives earned income:
• Trade income
• Employment income
• Pension
[less any S10(1)(a) trade / business loss]
Age EIR (Normal) EIR (Handicapped)

Below 55 $1,000 $ 4,000
55 to 59 $6,000 $10,000
60 and above $8,000 $12,000

Spouse / Handicapped Spouse Relief
• Can claim if married and living with, or supporting spouse.
• Spouse’s annual worldwide gross income must not exceed

$4,000
• Spouse relief is $2,000.
• Handicapped spouse relief is $5,500 (previously $3,500) wef

YA 2015.

Child Relief
Husband or wife can claim either
• Qualifying child relief (QCR) - $4,000 per child; or
• Handicapped child relief (HCR) - $7,500 per child
(previously $5,500) from YA 2015.
QCR/HCR can be shared.
In addition, wife can claim working mother child relief (WMCR).
But total claim for each child cannot exceed $50,000.


Qualifying Child Relief (QCR)/ Handicapped Child Relief (HCR)
Conditions for QCR:

• Legitimate child, step-child or legally adopted child;
• Below 16 years old; or receiving full time education (if 16 years old
or more);
• Annual worldwide gross income (excluding scholarships, bursary,
etc) not > $4,000
Conditions for HCR:

• Satisfies conditions for QCR
• Child is a physically or mentally disabled child
• Can be claimed even if the child is above 16

Working Mother Child Relief
Conditions:
• Married woman, divorced woman or widow.
• Child is Singapore citizen as at 31 Dec of preceding YA.
• Satisfies conditions for QCR.
Birth Order Amount of Relief (From YA 2009)

1st Child 15% of mother’s earned income
2nd Child 20% of mother’s earned income
3rd Child onwards 25% of mother’s earned income
Subject to maximum claim of $50,000 (QCR / HCR plus WMCR)

for each child.
Cumulative WMCR capped at 100% of mother’s earned income


Parenthood Tax Rebate
Rebate given to married Singapore tax residents to encourage them
to have more children and can be used to offset income tax payable
of either father or mother.
Any unutilised balance is carried forward to offset future taxes.
Conditions:
• New born child is legitimate child and Singaporean at time of
birth or within 12 months thereafter.
• Legally adopted child is Singaporean at time of adoption or
becomes Singaporean within 12 months.
Amount of Rebate
1st Child $ 5,000
2nd Child $10,000
3rd Child onwards $20,000

Parent Relief
Can claim for maintenance of own or spouse’s parents,
grandparents and great grandparents.
Conditions
• Dependent must be living in the same household or in a
separate household in Singapore and taxpayer has incurred
at least $2,000 in maintaining the dependent.
• Dependent 55 years or older, or handicapped
• Dependent’s income not >$4,000, no limit for handicapped
dependent).
Staying with Not staying with

dependent dependent
Type of relief From YA 2015 From YA 2015

Parent 9,000 5,500
Handicapped parent
14,000 10,000

Grandparent Caregiver Relief (from YA 2005)
Working mothers (including divorcees & widows) with
Singapore citizen children aged 12 years or below* can claim.
Conditions:
• Claimant’s parent/parent-in-law taking care of grandchild
is not working.
• Claimant’s parent/parent-in-law must live in Singapore.
• Claimant is only person claiming the GCR and in respect
of 1 parent/parent-in-law.
• Each working mother can claim a GCR of $3,000 for one
parent or parent-in-law.
• Can claim both GCR and Parent Relief.
* No age limit with effect from YA 2020 (Budget 2019) for handicapped
unmarried children who are Singapore citizens
Personal Reliefs & Allowable Deductions

Handicapped Brothers or Sisters Relief
Can claim $5,500 (previously $3,500) from YA 2015 for
maintaining own or spouse’s handicapped brother/sister.
Conditions:
• Dependent must be physically or mentally disabled.
• Dependent must be living in the same household or in a
separate household in Singapore subject to least $2,000
maintenance.
• Dependent’s annual income must not exceed $2,000
(income ceiling removed from YA 2010).
• 2 or more persons can share this relief.
• No other persons are allowed to claim other reliefs on
same sibling.

CPF
Compulsory only for Singaporeans and permanent residents.
Salaried Employees:
Maximum relief, based on the ceiling for ordinary wages (OW) and
additional wages (AW) @ 20%.
Date OW Ceiling Overall Income Cap CPF Relief
From 1 Jan 2016 $72,000 $102,000 $20,400
CPF in excess of statutory limit will not be allowable as relief.


Life Insurance Premiums
Premiums paid on a life policy of the taxpayer or the spouse can be
claimed as a relief provided:-
• Premiums paid do not < 7% of capital sum assured
• Insurance co has a branch/ office in Spore
Max relief is capped at $5,000 if there is no CPF contribution

Relief for CPF Cash Top-Ups (YA 2009)
With effect from YA 2009,
i. A tax relief of up to $7,000 per YA for cash top-up by a resident

taxpayer or his employer to his Special/Retirement account under
the CPF Retirement Sum Topping-Up Scheme (employer’s cash
top-up will be taxable income to employee), regardless of age.
ii. A separate tax relief of up to $7,000 per YA for cash top-ups made
to the resident taxpayer’s, spouse’s, siblings’, parents’ or
grandparents’ Special/Retirement account, regardless of age.
iii. A full tax deduction to the employers for cash top-ups to their
employees’ Special / Retirement account.

Supplementary Retirement (SRS) Contributions
• Effective from 1 April 2001
• Open to all Singapore citizens and PRs as well as resident
foreigners
• SRS complements the CPF, but participation is voluntary
and only for the employee, i.e. employer need not match
contributions
• Can contribute varying amounts, regardless of actual income
• From YA 2017, maximum yearly contribution for
o Singaporean / SPR - $15,300
o Foreigner - $35,700

Course Fees Relief
Can claim relief for course fees up to $5,500 on the following:
• Course leading to approved academic and professional

qualifications or vocational qualifications relating to trade or
employment.
• Can claim only the portion of course fees which you paid. Any
amount paid or reimbursed by employer or any other organisation
cannot be claimed.
• From YA 2009, resident taxpayers can defer and make the claim
within 2 YAs from the YA relating to the year in which they
completed the courses.

Relief for Foreign Maid Levy
Only woman with earned income can claim relief based on twice the amount
of levy paid for one foreign domestic worker, as long as couple employs a
foreign domestic worker, if one of the following conditions is satisfied:
• Married and living with husband;
• Married and husband not resident in Singapore;
• Separated or divorced or widowed & living with unmarried child.
Single taxpayers and male taxpayers cannot claim, as objective is to
encourage married women to join the workforce and at the same time have
more children.

Relief for Foreign Maid Levy (IRAS website)
YA 2020*New! Normal Concessionary#
No. of Months Levy 12 12

Paid in 2019
Total Levy Paid in $3,495 [($265 x 3 months) + $720 ($60 x 12

2019 ($300 x 9 months)] months)
or
$4,845 [($265 x 3 months) +
($450 x 9 months)]*
Maximum FML $6,990 (2 x $3,495) or $9,690 $1,440 (2 x $720)

Relief for YA 2020 (2 x $4,845)
Amount of Relief for Various Years of Assessment (YAs)

*From 1 Apr 2019: The levy rate for the first foreign domestic worker (FDW) employed, not on concession,
will be raised from $265 to $300 per month
The levy rate for subsequent FDW(s) employed, not on concession, will be raised to $450 per month

Relief for Foreign Maid Levy (working example)
Ms A a married woman engaged 2 foreign domestic maids on 1 April 2019. She

paid monthly FMLs of $300 and $450 respectively.
Relief that she can claim: $450*9 months x 2 times (higher FML paid which is
$450)

NSmen (Self/Wife/Parent) Relief
• Active NSman (i.e. called up annually for ICT and other

activities) can claim $3,000 relief. Inactive Nsman
(completed NS) can claim $1,500 relief. For NSmen who are
key appointment holders. The reliefs are enhanced to$5,000
(active) and $3,500 (inactive).
• Wife and Parent of NSman who are Singapore citizens can

claim maximum of $750 relief each.
• Maximum of 2 parents of each NSman.
• For NSman who is also a parent of an NSman, can only

claim relief for self or parent, whichever is higher.

Allowable Deductions
• Donations (250% deduction if made from 2009 to 2021
except for the year 2015 - 300% deduction)
• Subscriptions to professional bodies
• Travelling expenses
• Entertainment expenses
• Business expenses and capital allowances (for
businesses only)
• Unabsorbed capital allowances, unabsorbed tax losses
and unabsorbed donations (for businesses only)
Cap on income tax reliefs

Prior to YA 2018, there is no limit on the total amount
of personal reliefs an individual taxpayer can claim,
as long as the conditions for claiming each reliefs are
met.
With effect from YA 2018, the total amount of

personal reliefs that an individual taxpayer can
claim is capped at S$80,000.
Not-Ordinarily-Resident (NOR)
Scheme (will lapse after YA 2020 – Budget 2019)
The NOR scheme will cease after YA 2020. As such, the last NOR
status granted will run / be valid from YA 2020 to YA 2024.
Qualifying conditions:
• Resident in that YA; and
• Non-resident for 3 consecutive preceding YAs
Once the conditions are met, the NOR status will be accorded to the
taxpayer for 5 consecutive YAs
Example 1:
Mr A had been working in UK from year 2011 to 2016. He was assigned to

work in Singapore with effect from 1 March 2017.
Mr A is a R from YA 2018 and a NR for YA 2015-2017. Hence he qualifies

to be a NOR taxpayer from YA 2018 to YA 2022.
Scheme
Example 2:
Mr B, a German, has been assigned to work in
Singapore with effect from 1 August 2016.
Mr B is a NR from YA 2014-2016.
Is he a R from YA 2017 or YA 2018?
Qualifying NOR period should be

• YA 2017 to YA 2021; or
• YA 2018 to YA 2022?
Scheme
Concessions available:
• Time apportionment of Singapore employment

income
• Exemption on employer’s contribution to overseas
non-mandatory pension funds or social security
schemes.
Scheme
Time apportionment of Singapore employment
income
• At least 90 business days outside Singapore during the
basis period; and
• Income level of at least $160,000; with a floor rate of 10%
payable on the apportioned income
Calculation of days outside Singapore:
Day of departure – a day outside Singapore
Day of arrival – a day in Singapore
Vacation days are excluded
Scheme
Time apportionment of employment income
Example on Calculation of days outside Singapore:
Ms C left for a business trip to Vietnam on a 8pm flight on 10
May 2018 and returned on a 10am flight on 18 May 2018.
8 business days outside Singapore
Ms D left for a business trip to Japan on 12 April 2018 and

returned on 24 April 2018. During the trip, she took 2 days off
for a personal sightseeing tour.
10 business days outside Singapore (12 less 2 vacation

days)
Scheme
Example 1 of a tax computation with time apportionment
YA 2019 S$
Total employment income 730,000
No. of business days spent 90

outside Singapore in 2018
Income attributable to days spent 730,000 x 550,000
in Singapore 275/365
Tax payable on $550,000 95,150 (1st 320k -> $44550
Next $230k taxed @22% ->
$50,600
Effective tax rate 95,150/730,000 13.03%
Tax Savings * 39,600

* Tax payable on $730,000 is $134,750 (1st 320k->$44,550 and the
remaining $410k will be taxed at 22%)
Scheme
Example 2 of a tax computation with time apportionment
YA 2019 S$
Total employment income 365,000
No. of business days spent 100

outside Singapore in 2018
Income attributable to days 365,000 x 265,000
spent in Singapore 265/365
Tax payable on $265,000 33,625
Effective tax rate 33,625/365,000 9.21%
Regrossed taxable income* 279,743
Tax savings # 17,950
* (10% of $365,000 less $28,750 ) regrossed at 19.5% plus $240,000

# Tax payable on S$365,000 is $54,450
Scheme
Exemption on employer’s contribution to
overseas non-mandatory pension funds or social
security schemes.
• Taxpayer is not a Singaporean or PR; and
• Employer must not claim any tax deduction on the
contributions made to the pension funds or social
security schemes
• Income level of at least $160,000
Exemption is subject to a cap
Area Representative - AR
• Employee of a Rep Office
• Duty is to promote employer’s interest in the region
• Substantial travelling
• Taxed based on the amount of employment income
attributable to the number of days spent in Singapore
• benefits-in-kind (BIK) provided in Singapore are fully
taxable.
AR - Time Apportionment of Income

• employment income will be prorated based on the duration
of your physical presence in Singapore during the
calendar year:
Number of days of presence in Singapore

_________________________________ x Employment
Income
Total number of days in the basis period
• Present in Singapore for any part of the day, presence on

that day will be counted as one day in Singapore.
AR - Time Apportionment of Income

• Vacation leave during the calendar year, whether inside or outside of Singapore,
employment income will be pro-rated as follow:
Other Tax Schemes

Dual Employment Arrangement
• Employee with distinct duties
• Separate employment contracts (Singapore and overseas)
• Pays tax based on Singapore employment income under the
Singapore contract
• Needs very careful planning and subject to scrutiny from
IRAS
Tax Clearance
Applies to non-Singapore citizen employees and
SPRs ceasing employment or leaving Spore for
more than 3 mths
Obligations as an employer:-
• File the Form IR21 with IRAS at least one
month before the date of cessation
• Withhold any monies due to the employee until
tax clearance is given
END

Topic 6 - Individual

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Topic 6 - Individual

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CHAPTER 6 SIT Internal TAXATION IN SINGAPORE

Basis of Assessment for Individuals

Tax Residence- 2 years concession

1 Nov 2019 to 31 Dec

1 Jan 2020 to 3 May

Total Number of Days

Tax Residence- 3 years concession

1 Sept 2018 to 31 Dec

1 Jan 2019 to 31 Dec

1 Jan 2020 to 31 March

• 60 days or less - not taxable (not applicable for directors

Tax Residents Vs Non-Residents

Tax treaty benefits Available NA

First $30,000 - 200

First $40,000 - 550

First $80,000 - 3,350

First $120,000 - 7,950

First $160,000 - 13,950

First $200,000 - 21,150

First $240,000 - 28,750

First $280,000 - 36,550

First $320,000 - 44,550

Example of Personal Tax Computation of Resident Individual

Tax on 1st $20,000 Exempt

• Tax rebate for YA 2019 – 50%, capped at $200 (Budget 2019)

Taxation of Employment Income

Section 10(2) of Income Tax Act

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Treated as income of the year in which the director

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Not taxable by concession if employer is not claiming

Taxation of Employment Income

For these contributions, employee cannot claim personal

Taxation of Employment Income

• ESOW plans allow an employee of a company to own or purchase shares in the

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

• All home leave passages would be taxable in full

Taxation of Employment Income

Taxation of Employment Income

Transfer fee/Entrance fee

If the club membership is granted to the employee as a

Taxation of Employment Income

Taxation of Employment Income

Taxation of Employment Income

Medical benefits that are available to employees based on

Taxation of Employment Income