If you are a foreigner working in Singapore and planning to leave the country for good or for more than three months, you are required to obtain tax clearance from the Inland Revenue Authority of Singapore (IRAS). This guide explains the tax clearance process, forms required, employer obligations, and timelines for 2025.
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📌 What is Tax Clearance?
Tax clearance is the process by which IRAS ensures that all taxes owed by a foreign employee are settled before they leave Singapore. Employers must withhold all outstanding payments to the employee and notify IRAS using the relevant tax clearance form.
👤 Who Needs Tax Clearance?
You need tax clearance if you are:
- A foreign employee (including Singapore Permanent Residents leaving the country)
- Leaving Singapore for more than three months
- Changing to a job outside Singapore
- Leaving your current employer and not taking another job in Singapore immediately
You do not need tax clearance if you are a Singapore Citizen, or a Permanent Resident who is not leaving Singapore permanently.
📝 Forms for Tax Clearance (2025)
Employers must submit one of the following forms to IRAS at least one month before the employee’s departure date:
- Form IR21 – For foreign employees
- Form IR21A – For seafarers
- Form IR21B – For foreign directors
💰 Employer’s Role in Tax Clearance
- Stop all salary, bonus, and allowances due to the employee.
- Submit the relevant IR21 form to IRAS at least one month before departure.
- Release payment to the employee only after receiving the clearance from IRAS.
Failure to do so can result in penalties for the employer under Singapore’s tax laws.
📊 How IRAS Calculates Final Tax
The tax clearance amount includes:
- Tax on employment income up to the last working day
- Tax on benefits-in-kind (e.g., housing, transport, allowances)
- Tax on bonuses or termination payments
- Any previous unpaid taxes
⏳ Timeline for Tax Clearance
| Step | Timeline |
|---|---|
| Employer files IR21 form | At least 1 month before departure |
| IRAS processes clearance | Within 10 working days |
| Employee receives tax bill | Before departure date |
✅ How to Ensure a Smooth Tax Clearance
- Inform your employer of your departure date early.
- Ensure your employer files the IR21 form promptly.
- Clear all outstanding taxes before leaving Singapore.
- Keep copies of your Notice of Assessment for future reference.
⚠️ Penalties for Non-Compliance
Failure to obtain tax clearance can result in:
- Employer penalties up to S$1,000
- Prosecution for tax evasion
- Delays in receiving final salary payments
📌 Final Takeaway
Tax clearance is a crucial step for all foreigners leaving Singapore. By ensuring your employer files the correct forms and settles any outstanding taxes, you can leave the country without any legal or financial issues hanging over your head.
