Overview of Certificate of Residence (COR)

What is a Certificate of Residence (COR)

A COR is a letter certifying that a company is a tax resident in Singapore for the purpose of claiming tax benefits under the Avoidance of Double Taxation Agreements (DTAs). A Singapore tax resident company applying for treaty benefits provided under the DTA with a tax treaty partner may be required to submit a tax reclaim form issued by the tax treaty partner.

Within Singapore, a COR is used to establish a company’s eligibility for exemption on taxation of profits remitted from foreign operations in the form of dividends, foreign branch profits, and foreign sourced service income. Outside of Singapore, a COR is used as a means of satisfying requirements under the various DTAs that Singapore has established with partner states.

Why Apply for a COR

Companies need this certificate to claim tax benefits under the DTAs or Limited Treaties that Singapore concluded with foreign jurisdictions. Jurisdictions that conclude DTAs or Limited Treaties with Singapore are referred to as “treaty partners”.

  • Income derived by a Singapore tax resident company from foreign persons or companies may be subject to tax in that foreign jurisdiction. Under DTAs, treaty partners may provide tax breaks (e.g. tax exemptions and lower withholding tax rates) to tax residents of Singapore on income derived from their jurisdictions. Non-residents do not enjoy these benefits.
  • For DTAs with Limitation of Relief provisions, the Singapore tax resident company must meet an additional condition to claim treaty benefits.
  • The COR is required by and must be submitted to the tax authority of the treaty partner to prove that the company is a Singapore tax resident.

If you are not claiming benefits under the DTA or Limited Treaty but wish to obtain a letter certifying that the company is a tax resident of Singapore, you may write to IRAS on the company’s letterhead with the following information:

  • Name and Unique Entity Number (UEN) of the company;
  • Reason(s) for requesting the letter of residence;
  • Confirmation that the control and management of the company is exercised in Singapore; and
  • Year of Assessment for which the letter is required.

Companies Eligible to Apply for COR

To obtain a COR, a company must be a tax resident of Singapore.

Nominee companies

Nominee companies are not eligible to apply for COR as they are not the beneficial owner of the income derived from the treaty partner. A nominee company is a company that acts as a custodian of shares on behalf of the beneficial owners.

Foreign-owned Investment-Holdings companies

Foreign-owned investment-holding companies with purely passive sources of income and receiving only foreign-sourced income are not eligible to apply for COR. A foreign-owned company is a company where 50% or more of its shares are held by foreign companies/shareholders.

However, IRAS may still issue a COR if these companies are able to satisfy IRAS that:

  1. The control and management of the company’s business is exercised in Singapore; and
  2. The company has valid reasons for setting up an office in Singapore.

To satisfy IRAS of the conditions listed above, such companies must demonstrate that decisions on strategic matters are made in Singapore, for example by showing IRAS that their Board of Directors’ meetings are held in Singapore. Besides this, the company must also:

  1. Have related companies in Singapore that are tax residents of Singapore or have business activities in Singapore; or
  2. Receive support or administrative services from a related company in Singapore; or
  3. Have at least 1 director based in Singapore who holds an executive position and is not a nominee director; or
  4. Have at least one key employee (e.g. CEO, CFO, COO) based in Singapore.

Non-Singapore incorporated companies

Non-Singapore incorporated companies and Singapore branches of foreign companies are not eligible to apply for COR, except for the exceptional scenarios stated below, as these companies are not controlled or managed in Singapore. For Singapore branches of foreign companies, they are controlled and managed by their overseas parent company.

However, IRAS may still issue a COR if these companies are able to satisfy IRAS that:

  1. The control and management of the company’s business is exercised in Singapore (i.e. the Singapore branch is exercising the full control and management of the company); and
  2. The company has valid reasons for not incorporating in Singapore.

IRAS reserves the right to request for additional information on the company.

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Source: Inland Revenue Authority of Singapore