2021 Tax Guidance for Remote Employees in Singapore Due to COVID-19

The IRAS or Inland Revenue Authority of Singapore laid down tax guidance to taxpayers and employers who might be impacted by the COVID-19. Workers working remotely from Singapore because of COVID-19 will not be considered working in the country and their employment earnings are not subject to tax provided that they met certain conditions.

These tax rules apply to two kinds of remote employees: Singapore citizens or PRs who work overseas and are currently working remotely in the country because of COVID-19 and nonresident foreigners who work abroad and are on a short-term job in the country but cannot leave because of COVID-19. This article highlights the stipulated conditions these employees need to meet.

Singaporeans Or Singapore Permanent Residents Who Work Abroad And Are Currently Working Remotely In The Country Because Of Covid-19

Workers in this category who has been working from the country remotely for their overseas employers since 2020 because of COVID-19 will be treated as not exercising employment in the country for the time from the date of their return to the date they left the country in 2020, or up to March 31st 2021, whichever is earlier. This rule, however, will only apply if the following stipulated conditions are met.

If the period of these employees’ stay in Singapore did not go beyond December 31st 2020, the qualifying conditions include:

• No change of contractual terms governing the employment abroad before and after their return to the country; and

• This job is only a temporary job arrangement because of the outbreak.

If these conditions are observed, the employees’ income for the time of their stay in 2020 will not be taxed in Singapore. Otherwise, normal tax regulations will apply to identify the employees’ income taxability for such time.

On the other hand, if the period of these employees’ stay in the country is extended to 2021, apart from the above conditions, the following extra conditions are provided:

• During their stay in the country, the employees’ job would have been done abroad if not for the COVID-19’s travel restrictions.

• The employees will leave the country as soon as they can before March 31st, 2021. This condition will not be deemed as breached if the employees’ reason to keep working remotely in Singapore is because of the worsening COVID-19 circumstances in the country of their employers abroad and there is an increased risk of them infected by the virus should they return to work abroad.

• Their income during the stay from January 1st 2021 to March 31st 2021 is taxable in their overseas employers’ country.

If the workers meet all these conditions, their employment income for the period of their stay up to March 31st 2021 will not be subjected to tax. If they only meet the first two conditions, then their employment income will not be subjected to tax for the period of their stay up to December 31st 2020.

Non-resident Foreigners Working Abroad And Are On a Short-Term Business Assignment In The Country And Cannot Leave Because Of Covid-19

This type of remote workers will also be treated as not exercising employment in Singapore for the period of their extended stay in 2020, provided that:

• The period of their extended stay does not exceed sixty days; and

• The job they have performed during their extended stay is not related to their supposed task in the country and would have been done abroad if not because of the virus.

The employment income of workers who meet all these conditions will not be taxable for the period of their extended stay in the country.

Getting Help From Accounting Services Provider In Singapore

Apart from providing an accurate and timely financial report and tax filing, professional accounting services providers in Singapore are proficient in Singapore accounting and payroll regulations and stay up-to-date with any of these rules’ changes or modification.