Not-Ordinarily-Resident (NOR) scheme: final years: Common mistakes and rejection reasons

The Not-Ordinarily-Resident (NOR) scheme has fully lapsed: the last cohort’s five-year benefit window ran through Year of Assessment (YA) 2024, so no one in Singapore holds valid NOR status today, and the common mistakes now are historical filing errors and false assumptions about what replaces it.

What the NOR scheme was

The NOR scheme was a special tax scheme administered by the Inland Revenue Authority of Singapore (IRAS) that let a qualifying individual who became a Singapore tax resident, but had not been a tax resident in the two years before that, enjoy a five-year benefit window. Within that window, a NOR taxpayer who spent at least 90 days a year outside Singapore on business could have their Singapore employment income time-apportioned, so only the portion attributable to days physically worked in Singapore was taxed. A second limb exempted employer contributions to an overseas pension or provident fund from tax, subject to conditions. The scheme was closed to new applicants after YA2020, meaning the last individuals ever admitted had their five-year window run out at YA2024. As of today, the scheme is entirely historical for every taxpayer in Singapore.

Who this article is for

This guide is for HR teams, finance managers and expatriate employees who are still finding old NOR paperwork in their files, who are being asked by a new employer whether NOR “still applies”, or who filed on a NOR basis in a recent year and want to check the filing was correct before IRAS raises a query. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

The final cohort: what actually applied

An individual admitted to NOR status for, say, YA2020 as their first qualifying year would have had a benefit window running YA2020 to YA2024 inclusive, since the concession applied for five consecutive years from the first year of the award. For that final cohort, the two operative reliefs were:

• Time-apportionment of employment income where at least 90 days were spent outside Singapore on business in the relevant calendar year, and total Singapore employment income for the year was at least S$160,000.
• Exemption of employer contributions to a non-mandatory overseas pension or provident fund, capped at 35% of income, less any compulsory Central Provident Fund (CPF) contributions.

Because YA2024 was the last possible year of benefit for anyone in the scheme, every NOR claim on a Singapore individual tax return should now be closed. Any employment income earned from YA2025 onwards is taxed under the ordinary resident or non-resident rules, with no time-apportionment available.

Common mistakes made near and after expiry

1. Miscalculating the final qualifying year

The most frequent error in the last cohort’s filings was counting the five-year window from the wrong starting point, for example from the year the employee first arrived in Singapore rather than the first YA in which NOR status was actually granted. Getting this wrong either understated tax in a year that was no longer within the window, or left a genuine final-year claim unmade.

2. Assuming automatic renewal or extension

NOR status was never renewable, and the scheme was not extended past its planned closure to new entrants. Some employees assumed that because they still met the 90-day travel test, the concession would simply continue. It did not: once the five-year window closed, time-apportionment stopped regardless of ongoing travel patterns.

3. Missing the time-apportionment claim deadline

The time-apportionment relief had to be claimed in the individual’s income tax return for the relevant YA, supported by a day-count schedule of business travel. Employees who filed late, or who filed without the supporting schedule, sometimes lost the relief for that year even though they were still within a valid NOR window at the time.

4. Continuing to claim the overseas pension exemption after the window closed

A smaller number of cases saw employers continue to treat overseas pension contributions as exempt in payroll reporting after the employee’s five-year window had ended, because the payroll system was not updated. This created an under-declaration that surfaces on IRAS’s Auto-Inclusion Scheme cross-check and typically requires a voluntary disclosure to correct.

5. Treating a NOR-era tax position as still relevant to non-tax matters

Some employees and employers mistakenly linked NOR status to work pass eligibility or CPF treatment. NOR was purely an income tax time-apportionment and pension-contribution concession; it never affected Employment Pass, S Pass or Central Provident Fund obligations, which are assessed independently under the Employment of Foreign Manpower Act and the CPF Act.

What applies to expats now that NOR has lapsed

With NOR gone, the starting point for every expatriate in Singapore is ordinary tax residency. An individual is treated as a tax resident for a YA if, among other tests, they were physically present or exercised employment in Singapore for 183 days or more in the preceding calendar year, broadly under the residency rules in the Income Tax Act 1947. A tax resident is taxed on Singapore income at progressive rates after personal reliefs, with no time-apportionment available. A non-resident individual is generally taxed on Singapore employment income at a flat rate or the progressive resident rates, whichever gives a higher tax, with no personal reliefs.

Instead of NOR, expatriates and their employers should now look at other structuring options: separately verifying which portion of remuneration is genuinely foreign-sourced and taxed only where earned, correctly applying tax reliefs for tax-resident individuals such as the earned income relief, and reviewing double taxation agreements where a home country retains taxing rights. Section 13(7A) of the Income Tax Act 1947 separately exempts certain foreign-sourced income received in Singapore by a resident individual where the Comptroller of Income Tax is satisfied the exemption would be beneficial, and is worth understanding as the scheme most likely to be relevant to an expatriate’s foreign investment income going forward.

Employers reviewing remuneration structures for newly arrived expatriates should also confirm, before promising any tax treatment verbally, that the treatment they are describing is still current. Recruitment materials, offer letters and relocation guides drafted several years ago sometimes still reference NOR as an available benefit, which can create an expectation gap once the employee arrives and finds the scheme closed. Updating offer templates and relocation FAQs to remove NOR references, and replacing them with accurate statements about ordinary tax residency and any genuinely available reliefs, avoids a difficult conversation during onboarding.

Cost and timeline of sorting out a historical NOR position

Where a review of past NOR filings is needed, expect the following broad ranges based on typical Singapore tax advisory engagements: a desktop review of the last five years of an individual’s tax filings to confirm the NOR window was correctly applied typically runs from S$800 to S$2,500 depending on complexity; a voluntary disclosure to IRAS to correct an under- or over-claimed year, including preparation of the amended computation, typically adds two to four weeks of turnaround once source documents are available; and IRAS itself usually processes a straightforward voluntary disclosure and revised assessment within eight to twelve weeks of a complete submission.

Step-by-step: checking a historical NOR filing

1. Confirm the YA in which NOR status was first granted, using the original approval letter or IRAS correspondence.
2. Map the five-year benefit window against actual YAs claimed on tax returns.
3. For each year within the window, verify the 90-day business travel test was met and a supporting day-count schedule was filed.
4. Check payroll records for any overseas pension exemption claimed, and confirm it stopped once the window closed.
5. Where an error is found, prepare a voluntary disclosure under IRAS’s voluntary disclosure programme for reduced penalties, rather than waiting for a query.

Employer record-keeping now that the scheme is closed

Employers who sponsored NOR employees still have a residual record-keeping obligation. The Income Tax Act 1947 requires a person to keep sufficient records to support a return for five years from the relevant YA, so payroll files, day-count schedules and IRAS approval letters for the last cohort’s final YA2024 claim should be kept until at least the end of 2029. This matters most where an employee has since left Singapore, since a query from IRAS after departure is harder to resolve without complete internal records. Practically, HR and finance teams should archive: the original NOR approval correspondence, five years of day-count schedules showing business days spent outside Singapore, payroll reports showing how time-apportionment was calculated each year, and any correspondence with IRAS about the overseas pension contribution exemption. Where a company used a third-party payroll or tax agent to prepare NOR computations, it is worth confirming that agent still holds working papers, since agents do not always retain files indefinitely after an engagement ends.

Distinguishing NOR from schemes that are still active

Because the NOR scheme’s name and mechanics are still widely discussed online, it is easy to confuse it with reliefs that remain in force. The Not Ordinarily Resident concept should not be confused with an individual’s basic tax residency status, which continues to be assessed every year under the ordinary 183-day and related tests. It should also not be confused with the Area Representative scheme, which has its own separate concessionary basis for employees whose duties require substantial travel and remains a live, though narrow, concession. Employers structuring remuneration for a senior expatriate who travels extensively for business should look at whether the Area Representative basis or straightforward foreign-sourced income treatment is available, rather than assuming any residual NOR-style relief exists.

FAQs

Is anyone still eligible for NOR status today?
No. The scheme closed to new applicants after YA2020, and the last cohort’s five-year benefit window ended at YA2024, so no taxpayer currently holds valid NOR status.

Can a company ask IRAS to reopen or extend the NOR scheme for a specific employee?
No formal reopening mechanism exists. The scheme’s closure was a policy decision, not an administrative lapse that can be appealed on a case-by-case basis.

What happens if a NOR claim was made incorrectly in a past year that is now closed for objection?
A voluntary disclosure to IRAS is generally the right route, since it is normally treated more favourably than IRAS discovering the error through its own review, even outside the standard objection window.

Does losing NOR eligibility affect an Employment Pass or S Pass?
No. NOR was solely an income tax concession and has no bearing on work pass eligibility, which MOM assesses separately under its own framework.

What should a newly arrived expatriate look at instead of NOR?
Ordinary tax residency rules, applicable personal reliefs, the foreign-sourced income treatment under section 13(7A) of the Income Tax Act 1947 where relevant, and any double taxation agreement between Singapore and the individual’s home country.

Can a tax agent still file a late NOR claim for YA2024 if it was missed?
Generally no, once the statutory time limit to amend that YA’s assessment has passed, though a voluntary disclosure highlighting the omission may still be worth making if other errors in the same year need correcting, since IRAS assesses the full position together.

Where should an expatriate keep copies of their NOR approval and day-count records?
Both the individual and the employer should retain copies independently for at least five years after the final relevant YA, since either party may need to respond to an IRAS query and payroll systems are sometimes decommissioned when an employee leaves.

Related guides

For the practical paperwork trail from when the NOR scheme was still live, see our related guide on NOR scheme documents required and templates. For the wider personal tax position of resident and non-resident expatriates, see personal income tax for expats: resident vs non-resident. For the accounting side of getting a company’s tax and GST filings right, see personal tax filing for SME owner-directors. For how certificates of residence and treaty relief interact with cross-border income, see withholding tax, treaty benefits and certificates of residence. Authoritative background is available from the IRAS page on the NOR scheme and from the CPF Board on statutory contribution treatment for foreign employees.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.