A Letter of Undertaking (LOU) needs to be obtained from the employee stating that he/she will not leave Singapore permanently. With the LOU, the company is not required to file the Form IR21 for the employee but must keep the LOU in the company’s records.
However, this concession does not apply if the SPR employee is going on an overseas posting or employment. You are required to seek tax clearance for the SPR employee who is on an overseas posting or employment unless he/she meets the following conditions.
The period away from Singapore does not exceed six months;
The employee would return to Singapore to work for the same employer and continue to hold a valid work pass under the same employer during the period that the employee is away from Singapore; and
The Singapore employer continues to pay the employee’s remuneration during the said period.
The above applies to overseas postings on or after 1 Jan 2016 which are incidental to the employment in Singapore. Thus, tax clearance is still required for cases where the services rendered overseas are not incidental to the Singapore employment.