An IR21 is used in Singapore by employers who hire foreign employees. This form is sent to the Inland Revenue Authority of Singapore by employers for the purpose of seeking tax clearances for foreign employees.
A form IR21 is called a Notice of Cessation of Employment and Tax Clearance for a Foreign Employee. The human resources or finance department of a company typically completes and submits this form to the IRAS.
This form notifies the government of Singapore of all foreign employees working in the country whose employment is about to cease. The purpose is to collect payroll taxes from these employees. Employers are required to withhold the final paycheck of all foreign employees until the IRAS authorizes the company to release it. This gives the foreign employee time to settle all taxes owed.
Foreign employees working for fewer than 60 days do not need tax clearance. Foreign employees working in Singapore for 183 days or more and making less than $20,000 per annum also do not need tax clearance. A foreign employee who works for three continuous years in Singapore but earns less than $20,000 per annum also is exempt from seeking tax clearance.