§ 13K — Exemption of tax on income derived by non‑ordinarily resident individual

13K.—(1) Where an NOR individual is resident in Singapore in any year of assessment within the period he or she is an NOR individual, he or she may, within such time in that year of assessment and in such manner as may be specified by the Comptroller, elect for all or any of the following income of the NOR individual to be exempt from tax for that year of assessment:(a)

any relevant employment income for the year preceding that year of assessment, if the NOR individual —(i)

is not physically present in Singapore for at least 90 days in the year preceding that year of assessment by reason of the exercise of any employment in Singapore; and

(ii)

derives gains or profits of at least $160,000 from the exercise of any employment in Singapore for the year preceding that year of assessment;

(b)

despite section 10B(11), any contribution up to the relevant amount made by the NOR individual’s employer to any non‑obligatory pension or provident fund constituted outside Singapore in the year preceding that year of assessment, if —(i)

the NOR individual is neither a citizen nor a permanent resident of Singapore at the time such contribution is made;

(ii)

the NOR individual derives gains or profits of at least $160,000 from the exercise of any employment in Singapore for the year preceding that year of assessment; and

(iii)

a deduction with respect to such contribution has not been allowed to the NOR individual’s employer under section 14(1)(e).

(2) Where the notional tax payable on the apportioned employment income by an NOR individual who has elected for tax exemption under subsection (1) is less than 10% of the gains or profits from the exercise of any employment in Singapore by him or her —(a)

the apportioned employment income is readjusted such that the notional tax payable on the readjusted apportioned employment income is 10% of the gains or profits from the exercise of any employment in Singapore by the NOR individual; and

(b)

the relevant employment income is reduced by the difference between the readjusted apportioned employment income and the apportioned employment income.

(3) Any individual who satisfies any of the following criteria may apply to the Comptroller in such manner as the Comptroller may determine to be approved as an NOR individual for the specified period:(a)

if the individual is not resident in Singapore for any year of assessment before 1 January 2003, but is resident in Singapore for every succeeding year of assessment up to and including year of assessment 2003, for a period of 5 consecutive years from the first year of assessment in which he or she is resident in Singapore;

(b)

if the individual is resident in Singapore in year of assessment 2004, but is not resident in Singapore in year of assessment 2003, for a period of 5 consecutive years from year of assessment 2004;

(c)

if the individual is resident in Singapore in year of assessment 2005, but is not resident in Singapore in years of assessment 2003 and 2004, for a period of 5 consecutive years from year of assessment 2005;

(d)

if the individual is resident in Singapore in any year of assessment between the years of assessment 2006 and 2020 (both years inclusive), but is not resident in Singapore for all the 3 years of assessment immediately preceding that year of assessment, for a period of 5 consecutive years commencing from that year of assessment in which he or she is resident in Singapore.[32/2019]

(4) The Comptroller may, subject to subsection (4A) and such terms and conditions as the Comptroller may impose, approve the application of an individual to be an NOR individual.[32/2019]

(4A) No approval under subsection (4) may be granted for any application made on or after 1 January 2025.[32/2019]

(5) Where an individual has been approved as an NOR individual, approval must not be given under subsection (4) before the expiry of the period he or she is an NOR individual.

(5A) Where —(a)

an individual has been approved as an NOR individual before the year of assessment 2009;

(b)

the period of the individual’s approval has not expired at the beginning of that year of assessment; and

(c)

the individual has had income exempted from tax under this section in force immediately before 16 December 2008 for any year of assessment between the year of assessment 2005 and the year of assessment 2008 (both years inclusive),

then the individual may, at any time at or before filing with the Comptroller a return of his or her income for the year of assessment 2009, elect to continue to be subject to subsections (1) and (7) in force immediately before 16 December 2008; and in that event subsections (1) and (7) in force immediately before that date continue to apply to the individual for so long as he or she remains an NOR individual.

(6) Any election made under subsections (1) and (5A) and any approval granted under subsection (4) are irrevocable.

(7) In this section —“apportioned employment income”, in relation to an NOR individual, means total gains or profits from the exercise of any employment in Singapore by the NOR individual after deducting relevant employment income;

“NOR individual” means any individual who is for the time being approved as an NOR individual under subsection (4);

“notional tax payable”, in relation to gains or profits from the exercise of any employment in Singapore by an individual, apportioned employment income or readjusted apportioned employment income (as the case may be) means the amount of tax computed in accordance with the rates specified in Part A of the Second Schedule in respect of gains or profits from the exercise of any employment in Singapore by the individual, apportioned employment income or readjusted apportioned employment income (as the case may be) before any deduction under sections 37 and 39;

“obligatory” means required under any foreign written law;

“relevant amount”, in relation to an NOR individual, means —(a)

nil if A ≥ B; or

(b)

B ‑ A if A < B,where A

is the total amount of contributions made by the employer in respect of the NOR individual to any obligatory pension or provident fund constituted outside Singapore and for which the amount is not deemed as income accruing to the NOR individual under section 10B(11); and

B

is the amount of contribution which would have been required to be made by the employer under section 7 of the Central Provident Fund Act 1953 if the NOR individual were an employee and a citizen of Singapore;

“relevant employment income”, in relation to an NOR individual, means —

where C

is the number of days in the year preceding that year of assessment for which the NOR individual is not physically present in Singapore by reason of the exercise of any employment in Singapore;

D

is the number of days in the year preceding that year of assessment for which the NOR individual exercises any employment in Singapore; and

E

is the gains or profits from the exercise of any employment in Singapore by the NOR individual referred to in section 10(2)(a), (6) and (7), but excluding —

(a)

director’s fee; and

(b)

where any amount of tax of the NOR individual payable in Singapore is borne, directly or indirectly, by his or her employer, the amount of tax that is so borne.

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—(1) Where an NOR individual is resident in Singapore in any year of assessment within the period he or she is an NOR individual, he or she may, within such time in that year of assessment and in such manner as may be specified by the Comptroller, elect for all or any of the following income of the NOR individual to be exempt from tax for that year of assessment:(a)

any relevant employment income for the year preceding that year of assessment, if the NOR individual —(i)

is not physically present in Singapore for at least 90 days in the year preceding that year of assessment by reason of the exercise of any employment in Singapore; and

(ii)

derives gains or profits of at least $160,000 from the exercise of any employment in Singapore for the year preceding that year of assessment;

(b)

despite section 10B(11), any contribution up to the relevant amount made by the NOR individual’s employer to any non‑obligatory pension or provident fund constituted outside Singapore in the year preceding that year of assessment, if —(i)

the NOR individual is neither a citizen nor a permanent resident of Singapore at the time such contribution is made;

(ii)

the NOR individual derives gains or profits of at least $160,000 from the exercise of any employment in Singapore for the year preceding that year of assessment; and

(iii)

a deduction with respect to such contribution has not been allowed to the NOR individual’s employer under section 14(1)(e).

(2) Where the notional tax payable on the apportioned employment income by an NOR individual who has elected for tax exemption under subsection (1) is less than 10% of the gains or profits from the exercise of any employment in Singapore by him or her —(a)

the apportioned employment income is readjusted such that the notional tax payable on the readjusted apportioned employment income is 10% of the gains or profits from the exercise of any employment in Singapore by the NOR individual; and

(b)

the relevant employment income is reduced by the difference between the readjusted apportioned employment income and the apportioned employment income.

(3) Any individual who satisfies any of the following criteria may apply to the Comptroller in such manner as the Comptroller may determine to be approved as an NOR individual for the specified period:(a)

if the individual is not resident in Singapore for any year of assessment before 1 January 2003, but is resident in Singapore for every succeeding year of assessment up to and including year of assessment 2003, for a period of 5 consecutive years from the first year of assessment in which he or she is resident in Singapore;

(b)

if the individual is resident in Singapore in year of assessment 2004, but is not resident in Singapore in year of assessment 2003, for a period of 5 consecutive years from year of assessment 2004;

(c)

if the individual is resident in Singapore in year of assessment 2005, but is not resident in Singapore in years of assessment 2003 and 2004, for a period of 5 consecutive years from year of assessment 2005;

(d)

if the individual is resident in Singapore in any year of assessment between the years of assessment 2006 and 2020 (both years inclusive), but is not resident in Singapore for all the 3 years of assessment immediately preceding that year of assessment, for a period of 5 consecutive years commencing from that year of assessment in which he or she is resident in Singapore.[32/2019]

(4) The Comptroller may, subject to subsection (4A) and such terms and conditions as the Comptroller may impose, approve the application of an individual to be an NOR individual.[32/2019]

(4A) No approval under subsection (4) may be granted for any application made on or after 1 January 2025.[32/2019]

(5) Where an individual has been approved as an NOR individual, approval must not be given under subsection (4) before the expiry of the period he or she is an NOR individual.

(5A) Where —(a)

an individual has been approved as an NOR individual before the year of assessment 2009;

(b)

the period of the individual’s approval has not expired at the beginning of that year of assessment; and

(c)

the individual has had income exempted from tax under this section in force immediately before 16 December 2008 for any year of assessment between the year of assessment 2005 and the year of assessment 2008 (both years inclusive),

then the individual may, at any time at or before filing with the Comptroller a return of his or her income for the year of assessment 2009, elect to continue to be subject to subsections (1) and (7) in force immediately before 16 December 2008; and in that event subsections (1) and (7) in force immediately before that date continue to apply to the individual for so long as he or she remains an NOR individual.

(6) Any election made under subsections (1) and (5A) and any approval granted under subsection (4) are irrevocable.

(7) In this section —“apportioned employment income”, in relation to an NOR individual, means total gains or profits from the exercise of any employment in Singapore by the NOR individual after deducting relevant employment income;

“NOR individual” means any individual who is for the time being approved as an NOR individual under subsection (4);

“notional tax payable”, in relation to gains or profits from the exercise of any employment in Singapore by an individual, apportioned employment income or readjusted apportioned employment income (as the case may be) means the amount of tax computed in accordance with the rates specified in Part A of the Second Schedule in respect of gains or profits from the exercise of any employment in Singapore by the individual, apportioned employment income or readjusted apportioned employment income (as the case may be) before any deduction under sections 37 and 39;

“obligatory” means required under any foreign written law;

“relevant amount”, in relation to an NOR individual, means —(a)

nil if A ≥ B; or

(b)

B ‑ A if A < B,where A

is the total amount of contributions made by the employer in respect of the NOR individual to any obligatory pension or provident fund constituted outside Singapore and for which the amount is not deemed as income accruing to the NOR individual under section 10B(11); and

B

is the amount of contribution which would have been required to be made by the employer under section 7 of the Central Provident Fund Act 1953 if the NOR individual were an employee and a citizen of Singapore;

“relevant employment income”, in relation to an NOR individual, means —

where C

is the number of days in the year preceding that year of assessment for which the NOR individual is not physically present in Singapore by reason of the exercise of any employment in Singapore;

D

is the number of days in the year preceding that year of assessment for which the NOR individual exercises any employment in Singapore; and

E

is the gains or profits from the exercise of any employment in Singapore by the NOR individual referred to in section 10(2)(a), (6) and (7), but excluding —

(a)

director’s fee; and

(b)

where any amount of tax of the NOR individual payable in Singapore is borne, directly or indirectly, by his or her employer, the amount of tax that is so borne.

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