Singapore - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

Related content

Residency rules

Payroll considerations

Taxable income

Additional considerations

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than one year.

Residency rules

Are there special residency considerations for short-term assignments?

A non-resident individual, other than a director, exercising an employment in Singapore for not more than 60 days in a calendar year is exempt from tax on income arising from that short-term employment. If possible, it may be beneficial to structure short-term assignment such that the 60-day exemption applies.Singapore currently has tax treaties with several countries that may provide exemption for dependent services for short-term employment, subject to conditions.

Payroll considerations

Are there special payroll considerations for short-term assignments?

Tax treaty exemption would generally require that the payroll costs must not be borne by a permanent establishment in Singapore.

Taxable income

What income will be taxed during short-term assignments?

Singapore adopts the territorial basis of assessment whereby an individual is subject to income tax on income derived from or accrued in Singapore. The source of income from employment is generally the place where the employment is exercised regardless of where the contract is made or the remuneration is paid. Therefore, an employee who exercises employment in Singapore will be liable to Singapore income tax on the remuneration payable to him/her for his/her services rendered in Singapore even though the remuneration is paid outside Singapore.

Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in Singapore?

Where for certain reasons (e.g. length of assignment, cost-charging arrangements etc.) tax treaty exemption of the employment income in Singapore is not possible, careful planning of the short-term assignment start and end dates may result in tax savings.

Separately, there may be filing requirements to be fulfilled by the employer / employee pursuant to the short-term assignment, notwithstanding that tax-exemption may apply in accordance to the local tax laws or the double-taxation agreement.

© 2016 KPMG Services Pte Ltd (Registration No. 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International cooperative, KPMG International. All rights reserved.

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