Computing the Taxable Value of Accommodation Benefits Provided

Where an employer provides accommodation to its employees in respect of employment exercised in Singapore, the accommodation provided is a benefit and is taxable in the hands of the employees. The current formula, last revised and effective since YA
2015, to compute accommodation benefits (excluding hotels) is as follows:

  • The Annual Value (AV) of the property less total annual rent paid by the employee. Where AV is not available, the value will be the market rent paid by the employer (including those for furniture and fittings) less the rent paid by the employee;
  • plus 40% of the AV if the property is partially furnished or 50% of the AV if the property is fully furnished.

The AV is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees. Currently, employers are allowed to use the actual market rent paid for the accommodation to compute the value of the accommodation benefits if it is administratively more convenient to do so and in cases
where the AV is unavailable.

The Income Tax (Amendment) Act 2018 passed by Parliament on 2 October 2018 revises the default basis in computing the taxable value of accommodation to the actual rent paid by the employer instead of AV. Only in situations where the actual rent paid is not available (for example if the employer owns the property) or the IRAS is not satisfied that the actual rent paid is reflective of the market rent, the AV or other reasonable value as deemed by IRAS will apply. The change is effective from YA 2020.