Singapore is to end a tax relief that was designed to attract senior managers and highly qualified individuals to work in the city state.
The ‘not ordinarily resident’ (NOR) scheme was introduced in 2002 and will now close in 2020.
It offered people a favourable tax regime for five years.
The eligibility criteria included becoming a Singapore tax resident, spending at least 90 days a year outside of city-state for business purposes and having a minimum Singapore-sourced income of S$160,000 (£90,908; $118,352; €104,410).
People can still apply to the tax scheme this year and have tax concessions granted until 2024.
Advisers are not worried
However, while removal of tax reliefs is rarely welcomed, Singapore-based firms are not worried about this move.
“[The NOR] is accessed by relatively few people,” said Huw Wedlock, director of The Fry Group Singapore, to International Adviser.
“Singapore remains a low-tax regime and offers numerous other attractions for expats.
“One thing we do make clients aware of is if they travel a lot and are out of the country for 90 days in line with the NOR scheme, they can incur tax in other countries – for example, if they spend 30 work days in the UK, they could jeopardise their UK non-resident status and their worldwide income could be subject to UK tax – potentially at a higher rate than in Singapore.”
IA also reached out to AAM Advisory, with executive director Kelso Beggs confirming that the firm rarely sees anyone taking advantage of the scheme.
