Among the many benefits companies and individuals are accorded in Singapore is tax residency. And, in particular, foreigners are strongly advised to get a certificate of residence for their companies, as it could potentially save you hundreds, or even thousands of dollars in taxes.
To discover more, we invite you to tag along as we explore what COR is all about, how to apply for one, as well as the COR eligibility criteria in Singapore.
COR, as you’ve probably figured out already, stands for Certificate of Residence. This is a special recognition awarded to individuals and entities that happen to qualify for tax residence status in Singapore within a given year.
And why exactly would you need a COR?
Well, as it turns out, tax residents in Singapore happen to enjoy better tax benefits than their non-resident counterparts. Resident corporations, for instance, attract quite a fair amount of tax exemptions, as well as DTA perks.
And speaking of which, you’ll be pleased that Singapore’s COR is available even to multinational corporations. But, it comes under one condition - the company has to be run from Singapore to qualify. That means its control and management should be based in the city-state.
If you want to learn more about who qualifies as a tax resident in Singapore, click here.
With Singapore’s COR, you get to capitalize on the Avoidance of Double Taxation Agreements (DTAs) the city-state has signed with various foreign jurisdictions.
The good thing about these DTAs is, they compel treaty partners to grant Singapore COR holders tax breaks on earnings generated from their jurisdictions.
If you’re running a multinational company, therefore, you just need to submit Singapore’s COR to a foreign treaty partner - and they’ll exempt you from double taxation. That means you won’t be paying your corporate taxes to different jurisdictions.
Thankfully, Singapore’s COR applications are filed electronically via IRAS’s myTax Portal.
As an individual, you can apply for your tax residence certificate or COR:
The process itself is as follows:
Whichever method you choose, it’ll take about 2-3 weeks to process your application, after which you’ll receive the certification letter via mail.
Here’s how you can apply for a Singapore tax residency certificate or COR as a company:
Generally, the IRAS only awards the tax residency certificate to companies that are considered tax residents in Singapore.
To be eligible, your company has to conduct its business directly from Singapore. And if it happens to be a multinational, its activities have to be controlled and managed from Singapore. That, in other words, means Singapore should serve as your company headquarters in the preceding year.
If you’re seeking a tax residency certificate or COR for the year 2021, for instance, your company should have been managed from Singapore throughout 2020. Otherwise, the Inland Revenue Authority of Singapore or IRAS would end up declaring it a non-resident for the year 2020.
All in all, you stand the best chances of securing a Singapore COR if you work closely with tax experts in the field. You can check our tax services here for a free consultation!