COVID-19: Tax Guidance for Individuals - Working Remotely from Singapore due to COVID-19

21/04/2020
Working Remotely from Singapore due to COVID-19

The Inland Revenue Authority of Singapore (IRAS) has advised on its website that for individuals that have been exercising overseas employment but are now working remotely from Singapore due to travel restrictions in place due to COVID-19, it is prepared to treat them as not exercising an employment in Singapore, it they meet the following conditions:

Singaporeans/Singapore Permanent Residents Exercising Overseas Employment and are now Working Remotely from Singapore for that Employment

For individuals who are working from Singapore remotely for an overseas employer, IRAS is prepared to continue to consider them as not exercising an employment in Singapore for the period from the date their return to 30 September 2020*, if the following conditions are met:

  1. There is no change in the contractual terms governing their employment overseas before and after their return to Singapore; and
  2. This is only a temporary work arrangement in light of the COVD-19 situation.

If all the above conditions are met, IRAS has advised that their employment income for the period of their stay in Singapore up to 30 September 2020* will not be taxable in Singapore. However, normal tax rules will apply to determine the taxability of their employment income for work performed in Singapore, if any of the aforementioned conditions are not met

*IRAS has advised that the date, 30 September 2020, is subject to review as the COVID-19 situation develops.

Non-Resident Foreigners Exercising Overseas Employment who are on Short-Term Business Assignment in Singapore and are Unable to Leave due to COVID-19

For individuals that are unable to leave Singapore due to travel restrictions in place because of COVID-19 and have been working remotely from Singapore for their overseas employer during their extended stay in Singapore, IRAS is prepared to consider them as not exercising an employment in Singapore for the period of their extended stay, if the following conditions are met:

  1. The period of their extended stay is for a period of not more than 60 days; and
  2. The work they have performed during their extended stay is not connected to their business assignment in Singapore and would have been performed overseas if not for the COVID-19 situation.

If all of the aforementioned conditions are met, their employment income for the period of their extended stay in Singapore will not be taxable. However, normal tax rules will apply to determine the taxability of their employment income for the period of their extended stay in Singapore, if any of the conditions are not met.

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For example, an individual had worked in Singapore for 15 days and completed their short-term assignment on 6 March 2020. Thereafter, they extended their stay in Singapore due to COVID-19 and continued to work from Singapore remotely for their overseas employer.

If their extended stay in Singapore from 7 March 2020 to the date of their departure from Singapore (both dates inclusive) is not more than 60 days, and the work done would have been performed overseas if not for the travel restrictions caused by the COVID-19 situation, they will not be considered as exercising an employment in Singapore during the period of their extended stay.

Even so, the taxability of the employment income for their short-term assignment (excluding the period of their extended stay) is subject to normal tax rules#. In this example, as the assignment was completed within 15 days, which is not more than 60 days, the employment income for their short-term assignment will be exempt from tax. 

However, if they were given another business assignment in Singapore during their extended stay, the employment income for the period of their whole stay in Singapore for both assignments will be subject to normal tax rules#.     

#Under normal rules, an individual’s tax liability as a non-resident for the period they are on short-term business assignment(s) in Singapore is determined as follows:

  • If the total period of their assignment(s) is not more than 60 days in a calendar year, their employment income for the period is tax exempt
  • If the total period of their assignment(s) is more than 60 days but less than 183 days in a calendar year, their employment income for the period will be taxed at 15%, or the resident rates, whichever results in a higher tax amount

Source: IRAS