Tax Clearance for Foreign and SPR Employees (IR21)

Generally, when a non-Singapore Citizen employee (i.e. foreign or Singapore Permanent Resident (SPR) employee) ceases employment with a company in Singapore, goes on an overseas posting or plans to leave Singapore for more than three months, the company is required to seek tax clearance for him or her.

As an employer, the company has the responsibility to file the Form IR21 and withhold all monies due to the employee for tax clearance purpose. This applies to all work pass holders including Personalised Employment Pass (PEP) holders.

Errors in filing Tax Returns in Singapore

IRAS determines if the error/omission/discrepancy in the tax return was made without any intention to evade taxes. If found to be true, the said taxpayer could: 

• face a penalty of up to 200% of the amount of tax undercharged;
• be fined up to $5,000; and/or
• be imprisoned up to three years.

If the intention was to avoid paying taxes, the taxpayer may need to pay a penalty of up to 400% of the tax amount that was undercharged; be fined up to $50,000; and/or be imprisoned up to five years.

Consult an experienced tax professional to file your personal taxes correctly and avoid penalties.

Objecting to IRAS’ Notice of Assessment (NOA)

If a company does not agree with IRAS’s tax assessment, they can file an objection and request the assessment to be revised. Companies must file the objections within two months from the date of the Notice of Assessment (NOA). If IRAS does not receive any objections within that period, the assessment will be regarded as final. However, it’s important to note that even if the company disagrees with the assessment, they must pay the taxes stated in the assessment within one month from the issuance of the NOA.

Use an experienced corporate taxation services provider to help you through the process of filing taxes in Singapore.

There are 3 ways to file a notice of objection including myTax Portal – this is the recommended option by IRAS, objection form, and email or letter.