When to seek tax clearance
You must seek tax clearance at least one month before the non-citizen employee:

ceases to work for you in Singapore; or
leaves Singapore for any period exceeding three months; or
is posted to an overseas location of the same employer.
You may be liable to a fine not exceeding $1,000 if you do not do so. If you give less than 1 month's notice, state the reason in the Form IR21 (375KB)

http://www.iras.gov.sg/irasHome/page03.aspx?id=544



When your non-citizen employee ceases employment with you in Singapore or plans to leave Singapore for more than three months, you need to be sure that he has paid all his taxes. The process of ensuring this is tax clearance.

When to seek tax clearance
You must seek tax clearance at least one month before the non-citizen employee:

ceases to work for you in Singapore; or
leaves Singapore for any period exceeding three months; or
is posted to an overseas location of the same employer.
You may be liable to a fine not exceeding $1,000 if you do not do so. If you give less than 1 month's notice, state the reason in the Form IR21 (375KB)

When is tax clearance not required
Tax Clearance is not required for:

Singapore citizens
Singapore Permanent Residents (SPR) who are merely changing jobs in Singapore and are not leaving Singapore permanently after they cease employment.

You may obtain a Letter of Undertaking (375KB) from the SPR employee to confirm that he is not leaving Singapore permanently.
Non-Singapore citizens who worked in Singapore not exceeding 60 days in a calendar year (Scenario 1). This does not apply to directors of a company, public entertainers or individuals exercising a profession, vocation or employment of a similar nature.
Non-Singapore citizens who worked in Singapore for at least 183 days within a calendar year (Scenario 2) or a continuous period straddling two years (Scenario 3), and earned less than $20,000 annually. This two-year* administrative concession is applicable for foreign employees who enter Singapore from 01 Jan 2007 only.
Non-Singapore citizens who worked in Singapore for three continuous years or more and earned less than $20,000 annually (Scenario 4).
Non-Singapore citizens who are transferred to another company in Singapore due to restructure, merger or takeover.
Non-Singapore citizens who are away from Singapore for training or business purposes (exclude overseas posting) for three to six months.