Treatment of Income for Non-Resident Professional

Key Requirements

Fees, accommodation, airfare, allowances, transport and meals supplied or reimbursed by the payer can enter the gross amount. The 15% final gross method differs from the elective 24% net method applicable from 2023. Professional engagements do not receive the ordinary short-term employment exemption. If the contract promises payment net of Singapore tax and the payer bears that tax, gross up the amount: a net S$8,500 at 15% corresponds to S$10,000 gross and S$1,500 tax. Record whether the fee is gross or net before filing. The net-income election requires qualifying expense information rather than an unsupported estimate.

Build the Engagement Payment Schedule

Before choosing a method, prepare a working schedule of the fee and each benefit connected with the Singapore engagement. Record who pays the hotel, airfare and transport supplier, whether the professional is reimbursed, and whether the agreed fee is gross or a guaranteed net payment. Keep the contract, invoices and calculation together so a non-cash benefit is not omitted simply because it was paid directly to a supplier. This is a practical preparation checklist, not a separate prescribed return.

Check the Net-Income Option Separately

The net-income election is made for an engagement and is irrevocable. For income due and payable from 1 January 2023, use the applicable 24% net rate rather than copying the older 22% examples. Compare allowable expenses using the rules applicable to the payment date; an expense deduction under the net method cannot be applied to the 15% gross method.

For income due and payable from 1 November 2022, airfare and accommodation paid or reimbursed by the payer are taxable regardless of engagement length. The net-method deduction for airfare and accommodation incurred by the professional has its own conditions: the professional’s principal place of business is outside Singapore, the same activity was carried on before the trip, and the trip is solely to perform Singapore services. Qualifying expenses must also be wholly and exclusively incurred in producing the Singapore-sourced income and must not be private or capital expenditure. Private food costs are not deductible. Check those conditions before treating every travel receipt as an allowable expense.