Singapore
Complete guide to stock options and RSU taxation in Singapore. Covers territorial taxation, no capital gains tax, ESOP schemes, deemed exercise rules, and tax planning strategies.
Singapore's territorial taxation system and zero capital gains tax make it one of the most attractive jurisdictions for tech employees with equity compensation. However, employment-related equity income is fully taxable, and special rules apply when employees leave Singapore with unvested equity.
Overview of Singapore Tax System
Singapore taxes only Singapore-sourced income and income received in Singapore:
| Income Bracket (SGD) | Tax Rate |
|---|---|
| First $20,000 | 0% |
| $20,001 – $30,000 | 2% |
| $30,001 – $40,000 | 3.5% |
| $40,001 – $80,000 | 7% |
| $80,001 – $120,000 | 11.5% |
| $120,001 – $160,000 | 15% |
| $160,001 – $200,000 | 18% |
| $200,001 – $240,000 | 19% |
| $240,001 – $280,000 | 19.5% |
| $280,001 – $320,000 | 20% |
| $320,001 – $500,000 | 22% |
| $500,001 – $1,000,000 | 23% |
| Over $1,000,000 | 24% |
Key advantage: No capital gains tax. Once equity income has been taxed as employment income, all subsequent appreciation is tax-free.
RSU Taxation
RSUs are taxed under Section 10(1)(b) of the Income Tax Act as gains from employment:
| Event | Tax Treatment |
|---|---|
| Grant | No tax |
| Vesting | Employment income at FMV on vesting date |
| Sale | No capital gains tax on appreciation since vesting |
Example
| Event | Value (SGD) | Tax |
|---|---|---|
| RSUs vest: 1,000 shares at $50 | $50,000 income | Taxed at marginal rate |
| Sell at $80/share | $30,000 gain | No tax (capital gain) |
Stock Option Taxation (ESOP)
Stock options granted under Employee Stock Option Plans (ESOP) are taxed at exercise:
| Event | Tax Treatment |
|---|---|
| Grant | No tax (if at or above FMV) |
| Exercise | Employment income on spread (FMV at exercise − exercise price) |
| Sale | No capital gains tax |
Deemed Exercise Rule
When an employee leaves Singapore (ceases Singapore employment or becomes a non-resident), IRAS deems all vested but unexercised options to be exercised on the last day of employment:
| Scenario | Tax Treatment |
|---|---|
| Leave Singapore with vested options | Deemed exercised; tax on spread using FMV on last day |
| Leave with unvested options | Not deemed exercised; taxed when they actually vest/exercise |
| Exercised before leaving | Normal taxation at exercise |
Important: The deemed exercise rule can create a large unexpected tax bill when departing Singapore. Plan ahead by exercising options before your last employment day if the spread is favorable.
Moratorium on Deemed Exercise Gains
IRAS allows employees to defer the tax on deemed exercise gains until the options are actually exercised or sold, provided certain conditions are met and a banker's guarantee or deposit is provided.
QEEBR Scheme (Qualified Employee Equity-Based Remuneration)
The QEEBR scheme provides a tax deferral of up to 5 years for qualifying equity-based compensation:
| Feature | Details |
|---|---|
| Eligible instruments | Stock options, share awards, phantom shares |
| Deferral period | Up to 5 years from exercise/vesting |
| Conditions | Employer must be incorporated in Singapore; employee must be Singapore tax resident |
| Tax due | At end of deferral or when shares are sold (whichever is earlier) |
| Benefit | Spreads tax liability; may benefit from lower income in deferral year |
Not Ordinarily Resident (NOR) Scheme
The NOR scheme benefits individuals who spend significant time outside Singapore:
| Feature | NOR Benefit |
|---|---|
| Eligibility | Resident for 3+ years; spend 90+ days outside Singapore on business |
| Benefit | Only Singapore employment income for days spent in Singapore is taxable |
| Duration | 5-year qualifying period |
| Equity impact | Stock option/RSU income may be partially exempt based on overseas workdays |
CPF (Central Provident Fund)
| Contribution | Employee | Employer | Cap |
|---|---|---|---|
| Ordinary Account | Up to 20% | Up to 17% | $6,800/month ordinary wages |
| Applies to equity income? | No | No | Equity gains are generally not subject to CPF |
Equity compensation income is generally not subject to CPF contributions, as it is classified as a gain from employment rather than ordinary wages.
Cross-Border Considerations
| Situation | Treatment |
|---|---|
| Options granted in US, exercised in Singapore | Singapore taxes the portion attributable to Singapore employment days |
| Singapore employee relocated abroad | Deemed exercise may apply to vested options |
| Remote work for Singapore company from abroad | May reduce Singapore-taxable portion based on workday allocation |
| Short-term visitor (under 60 days) | Generally exempt from Singapore tax |
Planning Strategies
- Maximize the zero capital gains advantage — hold shares after vesting/exercise for tax-free appreciation
- Exercise before departure if you have significant vested options to avoid the deemed exercise surprise
- Evaluate QEEBR deferral — if you expect lower income in future years, deferring can reduce your effective rate
- Track overseas workdays for NOR scheme eligibility
- Time RSU vesting with lower-income years when possible
- Coordinate with international tax planning for equity grants from non-Singapore employers
- Consider Singapore's tax treaties — Singapore has 90+ tax treaties that may provide relief for double taxation
For employees considering a move, see our guide on relocating with equity for a comprehensive framework.
Disclaimer: This guide provides general tax information for educational purposes only. Singapore tax law changes regularly. Always consult a qualified Singapore tax advisor before making decisions based on this information. The authors accept no liability for actions taken based on this content.
Last Updated: March 2026 | Research Team: VestingStrategy
Singapore Tax FAQ
Get Expert Tax Insights
Weekly strategies for optimizing your equity compensation.