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Q:
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How to determining the Tax Residency of a Company?
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A:
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Generally, a company will be considered to be a Singapore tax resident for a particular Year of Assessment (YA) if the control and management of its business was exercised in Singapore in the preceding calendar year. For example, a company is a Singapore tax resident for YA 2020 if the control and management of its business was exercised in Singapore for the whole of 2019.
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Q:
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What is control and management?
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A:
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"Control and management" is the making of decisions on strategic matters, such as those on company policy and strategy. Where the control and management of a company is exercised is a question of fact. Typically, the location of the company's Board of Directors meetings, during which strategic decisions are made, is a key factor in determining where the control and management is exercised.
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Q:
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How to determine the tax residency of the company when the company is not able to hold its Board of Directors meeting in Singapore due to the travel restrictions relating to COVID-19?
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A:
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IRAS is prepared to consider the company as a Singapore tax resident for Year of Assessment (YA) 2021, provided it meets all the following conditions:
the company is a Singapore tax resident for YA 2020;
there are no other changes to the economic circumstances of the company; and
the directors of the company have to attend the Board of Directors meeting held outside Singapore or if the meeting is held via electronic means (e.g. via video-conferencing, teleconferencing, etc.) due to the directors being temporarily restricted in their travel as a consequence of COVID-19.
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How if the company is not a tax resident of Singapore for YA2020?
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A:
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IRAS will continue to consider the company as a non-resident for YA 2021, provided it meets all the following conditions:
the company has to hold its Board of Directors meeting in Singapore due to the travel restrictions relating to COVID-19; and
there are no other changes to the economic circumstances of the company.
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FAQ
