Q:
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What is IR21?
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A:
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Generally, when your non-Singapore Citizen employee (i.e. foreign or Singapore Permanent Resident employee) ceases employment with you in Singapore, goes on an overseas posting or plans to leave Singapore for more than three months, you are required to seek tax clearance for him. As an employer, you have 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.
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Q:
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When is tax clearance not required?
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A:
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Tax clearance is not required for the following categories of employees/scenarios:
1. Singapore Citizens
2. Singapore Permanent Residents (SPR) who are not leaving Singapore permanently after ceasing employment with you.
3. Non-Singapore Citizens who:
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1).
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Worked for 60 days or less in a calendar year
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2).
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Worked for 183 days or more within a calendar year and earned less than $21,000 annually
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3).
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Worked for 183 days or more within a continuous period straddling two years and earned less than $21,000 annually
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4).
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Worked for three continuous years or more and earned less than $21,000 annually
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5).
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Are transferred to another company in Singapore due to company merger or takeover or restructuring or posting within the same group of companies.
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6).
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Are away from Singapore for three to six months for training, business purposes or overseas posting.
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Q:
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When to file the Form IR21?
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A:
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If tax clearance is required for your employee, you must file the Form IR21 at least one month before:
1. The employee ceases to work for you in Singapore;
2. The employee starts an overseas posting; or
3. The employee leaves Singapore for any period exceeding three months.
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Q:
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How to file Form IR21?
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A:
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You may file tax clearance (Form IR21) online via myTax Portal or paper file by downloading the form from IRAS’s website and sending the form to IRAS.
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Q:
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What document I will receive after filing tax clearance?
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A:
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Upon tax clearance, you will receive a Clearance Directive from IRAS.
You will receive either a:
1. Directive to Pay Tax which informs you of the amount of monies to be remitted to IRAS; or
2. Notification to Release Monies which informs you to release the employee's withheld monies to him.
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Q:
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When to pay clearance tax?
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A:
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You are required to pay the amount of tax stated in the Directive to Pay Tax within 10 days from the date of the Directive.
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