What is Tax Clearance and IR21 Form?

 

Typically, when your non-Singapore Citizen worker stops working with you in Singapore, goes on an overseas posting or prepares to leave Singapore for greater than 3 months, you should notify IRAS at the very least one month beforehand and withhold all monies due to the employee from the date you are aware of his impending cessation of employment or departure from Singapore. This process is referred to as tax clearance and it applies to all work pass holders including Personalised Employment Pass (PEP) holders.

 

When to File the Form IR21

You must file the Form IR21 at least one month before if tax clearance is required for your employee. Here’s a recap when you need to file form IR21:

  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.

For more information, you may refer to official IRAS website for step-by-step guide on the tax clearance process.

Please take note that you do not need to submit your employee’s employment income via the Form IR8A or Auto-Inclusion Scheme (AIS) if the Form IR21 has already been filed.