The 183 day rule (tax residency)

[JakeF]

So just to clarify, sorry for this, Im in the process of signing a contract and PwC sorting out my EP for the investment bank ill be joining next Feb-April time, i imagine itll be a >1yr EP and id be very surprised if it isnt... So the day i start earning in Singapore, ill be classified as a tax resident? Im on an income of S$130k pa so i calculated a cumulative overall tax rate of 8.7% on that income resulting in around $11.5k tax over the year?

Correct. If your EP shows an expiry date that is more than 12 months from the issue date you will automatically be classified as a Tax Resident. However, should your EP be cancelled prior to your being here 183 days, then you will be charged at the Non-Resident rates of a Flat 15% or the resident rate, which is more. If you arrive here prior to July you would just pay the 15% when the IR-21 (Tax Clearance) is filed. If you were to arrive sometime after July it's possible that you could have filed a return, paid taxes on resident rates and sometime early the following year you EP was canceled before you reached 183 days. When the tax clearance is filed the would automatically recalculate the previous years tax and compute the current years taxes as well. Bit of a lot of info but there you go.

That is not exactly true. Depends if you came direct to Singapore. As far as the UK goes, I have no idea what their tax laws are. You may need to see a UK accountant for that. (I'm a Yank - but I can't help it, I was born there!)

Thanks SMS. The fast response was much appreciated. Will be sure to clarify it with a UK accountant. Cant be doing with paying stupidly high UK taxes on top of Singapore ones!
Also, the second i leave the UK, im no longer a tax resident of the UK and immediately tax resident of Singapore? PwC arent giving me a clear answer atm.

[jamonbellota]

Hello,

I have been reading about the 183 rule for a while now and I have a couple of questions:

- If you arrive to the country for work later than July, will you be applied the non-resident tax no matter what? I arrived pn the 10th of October but my contract is permanent (so I would say here for many years). I will inevitably have to pay this 15%?

- What happens if you go away on holidays before these 183 days have passed?

Thank you

[sundaymorningstaple]

No, not if you are on an Employment pass that is for 12 months or more. Even going on hols will not change this as long as your EP is running and not canceled before you leave. Normally, IRAS will use that (the EP duration) as a basis that you WILL be here long enough to straddle the 183 days across the first two calendar years. However, should they charge you the 15%, you can contact them to have it recomputed or amended.

[zzm9980]

^^

Correct from my experience. I arrived here end of July my first year. When tax assessment time came due, IRAS automatically charged me the lower rate. I didn't need to do a thing.