In Singapore, a special category of individuals called the Not Ordinarily Residents (NOR) are given favourable tax treatment for a period of five years of assessment.
To be eligible, an individual has to be:
- A non-resident in Singapore for tax purposes in the past three years of assessment; and
- In that year of assessment in which the individual qualified for the NOR status, he or she must have been a Singapore tax-resident
If you wish to revoke the three-year administrative concession for an earlier YA and be taxed as a non-resident, your application must come in within four years from the YA following the year in which you have been assessed as a resident.
If your application to revoke the three-year administrative concession is submitted after four years from the YA following the year in which you have been assessed as a resident, your application for the NOR scheme and tax concession will not be allowed.
Importantly, to retain a NOR taxpayer status, the foreigner is only required to be a tax resident in the first year of assessment, and not throughout the 5-year qualifying period.
The NOR status will lapse after the five-year qualifying period. You can apply for the NOR status anew if you meet the qualifying conditions again.
In considering the qualifying three YAs that you need to be a non-resident, all YAs for which you are a non-resident, including any such YA that may fall within an earlier five-year qualifying period for which you were accorded the NOR status, will be taken into account in deciding if you qualify as a NOR taxpayer for a subsequent five-year period.
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Benefits of the Singapore’s Not Ordinarily Resident scheme
- A NOR taxpayer pays income tax on only that part of his employment income that corresponds with the number of days he spends in Singapore provided he had spent at least 90 days outside Singapore for business reasons and has got at least $160,000 as total Singapore employment income. If the tax on the apportioned income is less than 10% of your total employment income, you will still be subject to a tax of 10% of your total employment income.
- A NOR taxpayer gets to enjoy tax exemption on contributions made by the employer to a non-mandatory overseas pension fund which would otherwise be taxable in his hands.
Ascertain your eligibility for various tax-related schemes in Singapore
Consult our tax professionals to understand all the tax schemes you are eligible for in Singapore depending on the number of days you spends in the country.