TAX EXEMPTION FOR INCOME REPATRIATED BY SINGAPOREANS

Mr Tay Beng Chuan asked the Minister for Finance whether his Ministry can grant a tax exemption for income repatriated by Singaporeans formerly working overseas after their return to Singapore, since this may otherwise deter Singaporeans from accepting overseas assignments.

Dr Richard Hu Tsu Tau: There is already an administrative concession in place since 1992 to allow Singaporeans working overseas to repatriate their foreign income to Singapore without attracting any Singapore tax. Under this concession, Singaporeans and permanent residents can elect to be treated as non-residents where they have been employed abroad for a period of at least 6 months in any year. As non-residents, the foreign income which they remit to Singapore during any year in which they are treated as non-residents would not be taxed. Even if they choose to remit their overseas employment income after their return to Singapore when they have become residents and be taxed on the income remitted, they will be given a tax credit for any foreign tax suffered on it. Unless the foreign tax is lower than the Singapore tax payable, which is rare given Singapore's generally low tax rates, there should be no further Singapore tax on the remittance with the tax credit given. With the administrative concession and the credits for foreign tax, Singaporeans should not be deterred from accepting overseas assignments.