Tax Clearance for Non-Singapore Citizen Employee

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Tax clearance is the process whereby you as a non-Singapore Citizen employee (e.g. Singapore PR, EP holders, PEP holders, S Pass holders) settle all your taxes due, before the expiry of a contract for work, or when you decide to work for another employer, and lastly, in cases where you plan to leave Singapore for a period of more than 3 months. It’s the obligation of your employer to ensure you pay all taxes due before you go.

For instance – When you leave a current employer, your employer would notify IRAS in good time to calculate your tax liability up to your last working day. All tax liabilities that you owe will have to be settled before you leave Singapore or you move on to your new job.

Typically, the employer will fill up an IR21 form to be submitted to IRAS for tax clearance. The employer shall also withhold payment of all monies due to you from the day of resignation (including salary, bonus, overtime pay, etc) to account for taxes payable to IRAS.

After form IR21 is submitted, IRAS would determine your tax liability by looking into the income you earned in the year of departure and that of the preceding year which was not assessed. A tax clearance directive would then be sent to your employer who would remit the tax amount liable to IRAS. In cases where monies withheld are more than the amount payable stated in the tax clearance directive, the employer will release the balance to you.

Do remember for foreigners intending to leave the country, you will only be able to leave after all tax dues are settled. If your taxes are not settled, you will be stopped from leaving Singapore and in such instance, you will need a release letter from IRAS.