On 29 November 2023, the Inland Revenue Authority of Singapore (IRAS) released updated guidance on the tax residency of a company/ certificate of residence and applying for a certificate of residence/ tax reclaim form for companies. The most important changes are summarized as follows:
Tax residency of a company or certificate of residence:
The tax residency of a company is determined by the location where its control and management are exercised. The Singapore Inland Revenue Authority (IRAS) has clarified that for companies using virtual meeting technology for Board of Directors meetings, a meeting will generally be considered to have strategic decisions made in Singapore if either of the following conditions is met:
- At least 50% of the directors with the authority to make strategic decisions are physically present in Singapore during the meetings.
- The Chairman of the Board of Directors is physically present in Singapore during the meeting.
Applying for a certificate of residence: The update to the Certificate of Residence (COR) application process in Singapore applies to applications for the calendar year 2025 and beyond. In addition to demonstrating that strategic decisions are made in Singapore, companies must also meet one of the following requirements:
- Have at least one director based in Singapore who holds an executive position and is not a nominee director.
- Have at least one key employee (e.g., CEO, CFO, COO) based in Singapore.
- Be managed by a related company based in Singapore (e.g., the related company makes decisions relating to the operations of the foreign-owned investment holding company or reviews the performance of the investments of the company).
