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Tax residency and working remotely, away from Singapore

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Myasis Dragon
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Re: Tax residency and working remotely, away from Singapore

Post by Myasis Dragon » Fri, 20 Nov 2020 8:54 am

theboomboom wrote:
Thu, 19 Nov 2020 11:56 am
Thanks Myasis Dragon. PNGMK is correct, I don't intend to leave Singapore and settle down elsewhere while retaining tax residency here. I know that is not possible. Instead, given that I am permanently WFH, I want to spend some time in other countries on tourist visas. Say spend a month or two maybe in Malaysia, then three months in Singapore and then two months back in my home country in the Netherlands, you get the idea. Basically, be more nomadic with a base in Singapore.

If I do this, I'll likely forego my lease in Singapore and stay either in Serviced Apartments or with my in-laws when I am back. To help me, my company is willing to put in a letter for secondment, but I am not sure how that works and if there are ifs and buts attached to that. Right now I am under the impression that I can do this provided I am in Singapore for >183 days, but I don't know what will happen if I spend less time here and don't settle down anywhere else. This will put me in a legal tight spot as I won't be a tax resident in Singapore, nor elsewhere, and technically avoiding taxes. This will bring its own sets of problems and is something I am looking to avoid.
Then, so long as you remain employed by your company, and so long as MoM continues to issue you an EP to work for that company, then you will always be tax resident in Singapore.

You would only be considered as non tax-resident if, for example, your company brought you over for five months. You would get a five month EP and be subject to non-resident tax. But your EP gives you residency status otherwise.

Things get substantially more cloudy when it comes to taxation in the country in which you are actually living. As others have noted, there are plenty of people who travel extensively and are out of Singapore for most of the week, if not more. But, they are also in other countries for short periods of time and don't worry about the tax situation.

If you're living in a country for longer periods of time, then things change. I offer you the following from my experience.

I had an American who worked exclusively in Kuala Lumpur. He used my home address in Singapore and was on EP. I paid him into a Singapore bank account. He was able to stay in KL for extended periods of time because my company rented the apartment. He paid his taxes in Singapore. This was technically illegal as he was working full time in KL, contracted into a KL company.

I kept an apartment in KL for about 18 months, again, rented by my company. I flew between Singapore and KL at least once a week, and although I had about about a 100 Malaysian immigration stamps in my passport, never once was I asked why I traveled back and forth so much. I thoroughly overstayed any 90 day social pass, and should have gotten a work permit (I had a Malaysian company, didn't want the financial obligation of applying for a work permit).

My view is that if you are working remotely for your Singapore company, you affect nothing in the country in which you are working, and you will not be found out... if there were to be any issue in the first place.

I will counter this with one more example. I had one employee working for my Thai company under a work permit (a million Baht deposit commitment). I had another employee that was on EP in Singapore to my company who flew back and forth, spending 3 to 5 days each week in Thailand. One night, she flew back, and being a slow night, the immigration official determined that she had spent 93 days out of 180 already and refused her entry to the country.

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Re: Tax residency and working remotely, away from Singapore

Post by theboomboom » Fri, 20 Nov 2020 11:53 am

Thanks all for the very helpful responses!

The consensus seems to be that having an EP makes you eligible for tax in Singapore by definition. MOM/IRAS doesn't really care how long you are in Singapore, provided you have an address and pay your taxes. When travelling to another country, I don't intend to overstay any tourist visa, so I don't think I should face any issues with being permitted into a country. I also can't stay too long back in my home country as my spouse would be on a tourist visa and staying there would make me a tax resident there (which I want to avoid).

I'll retain my bank account here and will remain working for the same company (for the foreseeable future). With regard to having an SG residence, I don't think there should be any issues having my registration with my in-laws, right? Even if I were to rent Serviced Apartments in the intermittent periods I'll be here.

Regarding the travel periods, I intend to do this only some time in 2022, I am hoping that by then the travel restrictions ease up. Also, my EP would have been renewed by then so that shouldn't be an issue either.

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Fri, 20 Nov 2020 2:29 pm

I think you're going to be ok BoomBoom. Yes - your inlaws address is a good place to register with ICA.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Fri, 20 Nov 2020 5:30 pm

I don’t believe that holding EP confers tax residency, but it does tie you to Singapore employment which confers a tax liability, regardless of the pass you hold and whether you qualify as a tax resident here or not.

Being liable to pay Singapore income tax does not exempt you from being liable to taxation in other countries, so you still need to look at the tax residency rules that apply in each country you intend to spend meaningful amounts of time in to be sure.

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Re: Tax residency and working remotely, away from Singapore

Post by theboomboom » Fri, 20 Nov 2020 6:30 pm

Pretty clear. Thanks for the replies!

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Re: Tax residency and working remotely, away from Singapore

Post by BigginHill » Tue, 01 Dec 2020 1:40 pm

malcontent wrote:
Fri, 20 Nov 2020 7:57 am
The global managers that I spoke of are not likely to see a great deal of difference, whether their income is taxed at the progressive 0-22% resident rates or the flat 15% non-resident rate in Singapore - in fact, the latter may even yield some tax savings.
Ah. No potential non-resident savings on employment income:

The employment income of non-residents is taxed at the flat rate of 15% or the progressive resident tax rates (see table above), whichever is the higher tax amount.

https://www.iras.gov.sg/irashome/Indivi ... Residents/

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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Tue, 01 Dec 2020 3:21 pm

Good point, I missed that.

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rk.imoto
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Re: Tax residency and working remotely, away from Singapore

Post by rk.imoto » Mon, 28 Dec 2020 7:42 am

The OP wanted to know if he can live a majority of the time outside of sg and still be a tax resident. The IRAS states that 183 resident days can be "straddled" between 2 years. Example: last day in December of one year combined with 182 days of the next year will give you sg tax residency for both tax years. In the scenario, you could actually stay only 3 months on average in sg per year. My plan is to straddle 183 days in sg every other year, then stay 179 days in Philippines and then 90 days somewhere else. https://www.iras.gov.sg/irashome/Indivi ... o-Pay-Tax/

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malcontent
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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Mon, 28 Dec 2020 9:25 am

I’d seen that before, but never looked closely. This could also be important in the year of departure from Singapore. Assuming I spend at least 182 days in a prior year and only 1 day in the current year - it sounds like that effectively straddles the two years. Is that your understanding as well?

As for your plan, presumably this would be implemented post-Covid since the Philippines is mostly closed to visitors at this time. For tax residency in the Philippines, as long as you are not a Filipino, overseas income should be exempt from tax no matter how long you stay. They allow foreign tourists to extend their stay up to 3 years at a go, exit the country for 1 day and repeat... probably the most liberal policy in the world.

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rk.imoto
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Re: Tax residency and working remotely, away from Singapore

Post by rk.imoto » Mon, 28 Dec 2020 11:16 am

malcontent wrote:
Mon, 28 Dec 2020 9:25 am
I’d seen that before, but never looked closely. This could also be important in the year of departure from Singapore. Assuming I spend at least 182 days in a prior year and only 1 day in the current year - it sounds like that effectively straddles the two years. Is that your understanding as well?
Yes. Per the previous IRAS link provided, any residency straddle of 183 days, without regard to the ratio of days in either year qualifies for Singapore Tax Residency for foreign non PR/non citizen. A nice example is provided here under "sample tax resident scenarios": https://www.pilotoasia.com/guide/person ... -singapore
malcontent wrote:
Mon, 28 Dec 2020 9:25 am
As for your plan, presumably this would be implemented post-Covid since the Philippines is mostly closed to visitors at this time. For tax residency in the Philippines, as long as you are not a Filipino, overseas income should be exempt from tax no matter how long you stay.
Post-Covid for sure. Hoping that I can return there even with 14 day quarantine soon. I have studied book, chapter, and verse of Philippines BIR tax law and found that you would be safe from Philippines (incredibly high!) tax rates if your stay is 180 days or less. While most countries would never know you are drawing income through remote work into a foreign bank account, it's best to live life with integrity and follow the rules as intended IMHO.

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malcontent
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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Mon, 28 Dec 2020 3:28 pm

rk.imoto wrote:
Mon, 28 Dec 2020 11:16 am
Post-Covid for sure. Hoping that I can return there even with 14 day quarantine soon. I have studied book, chapter, and verse of Philippines BIR tax law and found that you would be safe from Philippines (incredibly high!) tax rates if your stay is 180 days or less. While most countries would never know you are drawing income through remote work into a foreign bank account, it's best to live life with integrity and follow the rules as intended IMHO.
Interesting. I suppose you will enter as a tourist and immediately extend on the spot to the maximum 59 days, after which, get your ACR-i card, then get a 6 month, then 1 month extension. Keeping it under 6 months will avoid the added hassle and cost of emigration clearance as well.

You are at the head of the class if you’ve already studied the BIR tax code. Although generally, income from overseas should be tax free to non-Filipinos living in the PI (especially if it has already been taxed). However, there could be exceptions and fine print, so agree - staying under 180 days is the safest.

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rk.imoto
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Re: Tax residency and working remotely, away from Singapore

Post by rk.imoto » Mon, 28 Dec 2020 4:48 pm

malcontent wrote:
Mon, 28 Dec 2020 3:28 pm
rk.imoto wrote:
Mon, 28 Dec 2020 11:16 am

Interesting. I suppose you will enter as a tourist and immediately extend on the spot to the maximum 59 days, after which, get your ACR-i card, then get a 6 month, then 1 month extension. Keeping it under 6 months will avoid the added hassle and cost of emigration clearance as well.

You are at the head of the class if you’ve already studied the BIR tax code. Although generally, income from overseas should be tax free to non-Filipinos living in the PI (especially if it has already been taxed). However, there could be exceptions and fine print, so agree - staying under 180 days is the safest.


Thanks for your questions, your comments are correct in spirit. I'll leave these comments for a different forum. Those not looking for Philippines stuff won't like our using this thread for that discussion. Take care.

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Mon, 28 Dec 2020 4:53 pm

You all should keep in mind that there is a 100% rebate on income tax possible in Singapore for "Area Representatives" for days spent outside of Singapore. I worked for a UK company for about 5 years (that had no base here, and I am a SPR) - during that time I was able to deduct off my tax all time spent overseas.

"Area Representative Schemes
If you work for a foreign employer and operate from a base in Singapore to discharge your regional functions and duties, you may enjoy time apportionment of employment income, subject to qualifying conditions. "
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Mon, 28 Dec 2020 5:01 pm

I kept an apartment in KL for about 18 months, again, rented by my company. I flew between Singapore and KL at least once a week, and although I had about about a 100 Malaysian immigration stamps in my passport, never once was I asked why I traveled back and forth so much. I thoroughly overstayed any 90 day social pass, and should have gotten a work permit (I had a Malaysian company, didn't want the financial obligation of applying for a work permit).

My view is that if you are working remotely for your Singapore company, you affect nothing in the country in which you are working, and you will not be found out... if there were to be any issue in the first place.

I will counter this with one more example. I had one employee working for my Thai company under a work permit (a million Baht deposit commitment). I had another employee that was on EP in Singapore to my company who flew back and forth, spending 3 to 5 days each week in Thailand. One night, she flew back, and being a slow night, the immigration official determined that she had spent 93 days out of 180 already and refused her entry to the country.
Malaysia is notoriously lax on this. WE have many expats on EP's in Singapore who are based in KL and pay nothing in KL but pay tax in Singapore (as part of the corporate hypo tax arrangement). It's a BS loophole KL needs to slam shut (and throw some expats in prison for). I notice that we don't do that in Thailand.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

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Re: Tax residency and working remotely, away from Singapore

Post by thomas_et » Wed, 30 Dec 2020 11:27 pm

I'm also interested in this topic and have one extra question.

Can this way of life (3 months/year in SG, rest of the year in many different countries) be a cause of not getting EP renewed (assuming the company is ok with it)?

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