The Not Ordinarily Resident (NOR) Taxpayer Scheme was announced in the 2002 Budget Statement. It aims to attract talents to relocate to Singapore.
The NOR Scheme extends favourable tax treatment to qualifying individuals for a period of 5 years of assessment. An NOR taxpayer must meet the following criteria:
- He must not have been a Singapore tax resident in the 3 years of assessment before the year he first qualifies for the NOR scheme; and
- He must be a tax resident for the year of assessment in which he wishes to qualify for the NOR scheme.
A NOR taxpayer will enjoy the benefit of time apportionment of employment income only if he meets additional conditions: he must spend at least 90 days outside Singapore for business; and he must have a minimum Singapore-sourced employment income of $160,000. Where the tax on his apportioned Singapore employment income is below 10% of his total Singapore-sourced employment income, the NOR taxpayer will still be subject to a tax of 10% on his Singapore-sourced employment income. The time apportionment incentive means he pays income tax on only a portion of his employment income sourced in Singapore. The taxable amount will be based on the number of days he spends in Singapore per calendar year.
In addition, an NOR taxpayer will enjoy the following benefits:
- Favourable tax treatment of pre-assignment income
Individuals who relocated to Singapore were taxed on the income they remitted into Singapore before 1st Jan 2004 even when that income was earned prior to their relocation to Singapore. The remittance of such pre-assignment income by an NOR taxpayer would be exempt from tax. (With effect from YA2005, Singapore taxes individuals on a territorial basis. All foreign-source income remitted by individuals is tax-exempt.)
- Favourable tax treatment of contributions to overseas pension funds
Subject to the cap the employer's contributions to CPF for Singaporeans, the employer's contributions to overseas pension funds on behalf of a non-citizen NOR taxpayer will be exempt from income tax in the hands of the employee. This is conditional on the fact that the employer does not claim a tax deduction for these contributions.
More details on the NOR scheme can be found on IRAS's website.
Useful NOR Information