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Resigning from a job is a huge life decision. Just like applying for a job, resigning from it also entails certain formalities that every employee must comply with to maintain his or her integrity and avoid any serious consequences in the long run.
Employment Pass (EP) holder employees who are about to resign from their companies in Singapore and may leave the country soon commonly create two questions for employing Company—the specific procedures that the companies must follow and any considerations that their companies need to take note of. This article will elaborate on these aspects, as well as on other necessary details about resignation procedures for EP holders in Singapore.
Your work visa, such as Work Permit, S Pass, EP, EntrePass, and Personalised Employment Pass is considered cancelled on your last day of employment. Then, you will be issued a 30-day short-term visit pass to settle anything outstanding. Next, you must leave Singapore. Before leaving Singapore, you must return your EP card to the immigration officer.
It is also important to note that your salary will be withheld by your employer for tax clearance purposes with IRAS. Once IRAS has issued a Tax Clearance Certificate, which confirms that your tax liabilities have been accounted for, your salary will be released.
This entire process will last for around 21 days. However, if there are outstanding tax liabilities against you, IRAS may issue a stop order certificate.
The discussed policies only apply to EP holders and not to Singapore permanent residents and citizens.
The procedures that a Singapore company must adhere to upon your resignation are as follows:
This entire procedure guarantees that before you leave Singapore, your salary and taxes have been properly settled and you have no outstanding dues. You may also reconnect with all the individuals or companies that you have transacted with, such as landlords, banks, Telco companies, or schools, to settle any liabilities, if there are any.
Suppose that you have worked for a Singapore company from January to July 2020. After submitting your resignation letter to the management, you are scheduled to leave the country in August. In this circumstance, your tax filing responsibilities (as per Singapore Income Tax Act and Regulations) will be due in April 2021. When August comes and you have already resigned and are likely to leave Singapore, IRAS will not know anything about your resignation and will not issue any tax payments from you. Consequently, you may not be able to comply with the tax dues after leaving Singapore. When April 2021 comes, IRAS may inquire with your previous company about you and your unpaid taxes.
As an EP holder, you must follow the proper procedures of resigning in Singapore. Ensure that you have already acquired the tax clearance before you leave Singapore.
There are also instances when an EP holder will be resigning from one company to work for another company in Singapore. If this is your case, you will still need to undergo all the previously mentioned procedures, from salary withholding to settling tax liabilities and acquiring the tax clearance certificate from IRAS. Following the same procedures even though you will be staying in Singapore is important for this simple reason: your company must no longer be held responsible for your actions after your resignation.
Suppose that you are not coping well with your new work and decide to resign again. If you resign without fulfilling the required formalities, you will still be putting the same risks and tax liabilities on your previous company’s name.
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