IRAS has received a number of enquiries from both employers and individuals, seeking clarification on whether they need to seek tax clearance for their foreign employees.
Employers can now self-help at IRAS website using our newly designed Tax Clearance Calculator
. It is easy to use and will provide greater certainty to employers.
Where tax clearance is NOT required
Employers are reminded not to file the Form IR21 to IRAS. With effect from 1 Oct 2009, IRAS will no longer process tax clearance for cases clearly falling within the scenarios found at Annex 1. For the paper Forms IR21 received, IRAS will return them to the employer. If employers e-file the Form IR21 via myTax Portal
, they will receive an online notification to release any monies withheld for tax clearance.
Where tax clearance is required
Employers must seek tax clearance by filing Form IR21 at least one month before the date of cessation. Employers are reminded to file the Forms IR21 promptly to IRAS. If less than one month notice is given, they should state the reason in the Form IR21. There are penalties for late filing.
Employers are strongly encouraged to e-file the Form IR21. Most of the Forms IR21 are now filed electronically. With e-filing, employers will enjoy the following benefits:
(1) Immediate acknowledgement upon successful e-filing
(2) Faster tax clearance (within 7 working days) compared to paper filing which usually takes 21 days to process
(3) View Tax Clearance status and print the Clearance Directive online. No more waiting for the paper Directive to arrive by post!
For further clarifications, please call clearance hotline at 1800-356 8655 or email: taxclear@iras.gov.sg.
