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Tax Guidance for Remote Employees in Singapore Due to COVID-19

Singapore - Remote Employees
By: Laura Lough, Esq. | 13 May 2020

The Inland Revenue Authority of Singapore (IRAS) is providing tax guidance to employers and taxpayers that may be affected by COVID-19. Employees working remotely from Singapore due to COVID-19 will not be considered to be working in Singapore and their employment income will not be taxed in Singapore as long as certain conditions are met.

Two Types of Remote Employees
The tax guidance applies to two types of remote employees:

  1. Singaporeans and Singapore permanent residents who work overseas and are now working remotely in Singapore for that job due to COVID-19.
  2. Nonresident foreigners who work overseas and are on a short-term business assignment in Singapore and unable to leave due to COVID-19.
Employment Income Not Taxable in Singapore
Singaporeans and Singapore permanent residents will not be considered to be working in Singapore for the period from the date of their return to 30 September 2020 provided:
  1. There is no change in the contractual terms governing their employment overseas before and after their return to Singapore.
  2. This is a temporary work arrangement due to COVID-19.
If these conditions are met, their employment income for the period of their stay in Singapore up to 30 September 2020 will not be taxable in Singapore.

Nonresident foreigners will not be considered to be working in Singapore for the period of their extended stay provided:
  1. The period of their extended stay is for no more than 60 days.
  2. The work they have done during their extended stay is not connected to their business assignment in Singapore and would have been performed overseas if not for COVID-19.
If these conditions are met, their employment income for the period of their extended stay in Singapore will not be taxable in Singapore.

Note: If the above conditions are not met for either type of remote worker, then normal tax rules will apply to determine the taxability of their employment income.

Laura Lough, Esq., is Director of Publications for the American Payroll Association