Remote Work & Tax: A Guide for Employees of Foreign Companies in Singapore

Roger Pay
3 minutes ago
4 min read

Working for an overseas company while living in Singapore? Learn about the 60-day tax exemption, Area Representative status, and how to stay IRAS compliant in 2024/2025.

Remote Work & Tax: A Guide for Employees of Foreign Companies in Singapore

Are You Working in Singapore for a Foreign Employer?

With the rise of remote work, many professionals in Singapore are employed by entities with no physical presence in the Lion City. While your contract may be "overseas," your tax liability is determined by where you physically perform the work.

If you are physically in Singapore while clicking "send" on those emails, you are likely subject to Singapore’s territorial tax system.

Key Highlights:

Territorial Basis: Income is taxed based on where the service is rendered, regardless of where the salary is paid.
The 60-Day Rule: Short-term assignments may be tax-exempt.
Area Representative Status: Regional roles may qualify for "Time Apportionment" to reduce tax bills.

1. The 60-Day Tax Exemption Rule

If you are a non-resident and your work in Singapore totals 60 days or less in a calendar year, your employment income is exempt from tax.

Crucial Caveats:

Continuous Stay: This exemption does not apply if your stay spans three continuous years or more.
Travel Counts: For business trips, every day spent in Singapore (including arrival/departure and weekends) counts toward the 60-day limit.
Directors & Professionals: This exemption does not apply to public entertainers or company directors.

2. Managing Tax for Regional Roles (Area Representative Scheme)

If you are based in Singapore but your "office" is the entire Asia-Pacific region, you may qualify as an Area Representative (AR). This is a significant tax-saving strategy.

Do You Qualify? (YA 2026 Criteria)

To be taxed only on the time you spend inside Singapore, you must meet four criteria:

Non-Resident Employer: You must be employed by a foreign entity.
Geographical Convenience: You are based here to manage a region.
Primary Service Location: You perform services primarily outside Singapore.
No Local Charge-back: Your salary cannot be charged to a Singapore-based branch or permanent establishment.

How it Saves You Money

Under the AR scheme, your taxable income is pro-rated:

(Days in Singapore / Total Days in Year) x Total Remuneration = Taxable Income

Note: Benefits-in-kind (like housing or car allowances) provided in Singapore remain fully taxable.

3. Tax Residency & Rates for Remote Workers

Your tax rate depends on how long you stay in Singapore:

Duration of Work	Tax Status	Rate
≤ 60 Days	Non-Resident	Exempt
61 – 182 Days	Non-Resident	15% (or resident rate, whichever is higher)
≥ 183 Days	Resident	Progressive Rates (0% to 24%)

4. Compliance Checklist: What You Need to Do

Don't wait for an audit. Follow these steps to ensure Compliance & Risk Optimization:

Step 1: Track Your Travel. Keep a precise log of your arrival and departure dates. IRAS uses ICA records to verify stays.
Step 2: Check Your Employer’s Status. Confirm if your employer has a "Permanent Establishment" (PE) in Singapore. If they do, you cannot claim Area Representative status.
Step 3: File Your Returns. Even if you qualify for an exemption, you may still be required to file a tax return if your income exceeds S$22,000.

Frequently Asked Questions

Q: I work for a US company from my home in Singapore. Do I pay tax? A: Yes. Because the "exercise of employment" happens in Singapore, your income is considered Singapore-sourced and is taxable.

Q: Does "working from home" count as "working in Singapore"? A: Absolutely. IRAS focuses on your physical location while the work is performed, not the location of the server or the employer.

Q: Can I claim tax reliefs as a foreign employee? A: Only if you are considered a Tax Resident (staying 183 days or more). Non-residents are generally not eligible for personal tax reliefs.

Need Help with Your Filing?

Navigating cross-border tax can be complex. For specific scenarios regarding dual-residency or Double Taxation Agreements (DTA), visit the official IRAS website or consult a certified tax professional in Singapore.

How Bestar Singapore Can Help

Navigating the intersection of foreign employment and Singapore’s tax laws is complex. Bestar serves as your local tax partner, ensuring you remain fully compliant with IRAS while optimizing your tax position.

1. Personalized Tax Residency Assessment

Whether you are on a short-term assignment or based permanently in Singapore, Bestar accurately determines your tax residency status. This is critical for choosing between the flat 15% non-resident rate and the progressive resident rates.

Benefit: Avoid overpaying tax due to incorrect residency filing.

2. Area Representative Scheme Optimization

For regional roles, Bestar specializes in applying for the Area Representative (AR) Scheme. We assist in:

Verifying your eligibility against current YA 2024/2025 criteria.
Calculating the precise Time Apportionment of your income to reduce taxable overhead.
Handling the complex reporting of Benefits-in-Kind (BIK).

3. Double Taxation Relief (DTA) Consulting

If your income is already being taxed in your employer’s home country (e.g., USA, UK, or Australia), Bestar’s experts leverage Singapore’s extensive network of Double Taxation Agreements. We help you claim foreign tax credits to ensure you never pay tax twice on the same dollar.

4. Seamless Filing & Representation

For Employees: We prepare and file your personal income tax returns accurately, managing all communication with IRAS.
For Foreign Employers: We advise overseas entities on their reporting obligations (Form IR8A) and help process Tax Clearance (Form IR21) for departing employees.

5. Corporate & Payroll Outsourcing

If your foreign employer is looking to formalize their presence, Bestar provides end-to-end support for:

Representative Office (RO) Setup: Strategic advice on market entry.
Employer of Record (EOR) / PEO Services: Managing local payroll and CPF compliance without the need for a local entity.

"Bestar doesn't just file forms; we provide a strategic shield against non-compliance risks, giving you peace of mind while you focus on your regional career."

Take the Stress Out of Tax Season

Don't risk penalties or miss out on eligible tax reliefs. Contact Bestar Singapore today for a comprehensive review of your foreign employment tax status.