Accommodation whilst working for a SG client is a benefit?

[wallamb]

Hi there, I wonder if anyone can help. I work for a LDN based company who's client is based in SG and is a SG company so have been staying in a Serviced Apartment (which my company arranged on my behalf without any input from me). I've just been told that any flights home and accommodation is seen by the IRAS as a benefit and that i must pay tax on them. I'm just wondering if anyone else has this situation and whether I should personally be liable or my LDN based company - I am afterall working in SG for the SG based client and it's not really a benefit, it's because I'm working for a SG based client and have to be in SG. Should my company pay this tax or me personally? Seems unfair that I have to pay this personally as it's my company who's client is based in SG. Thanks.

[Strong Eagle]

YOU owe the tax because it is part of your remuneration... it doesn't matter whether it's called housing allowance, flights home... or simply salary... you receive a monetary benefit and it is taxable in Singapore to you. That's the law.

As to whether the company ought to be picking up your IRAS taxes... well... that's something for you and your company to discuss and negotiate... you still need to pay the taxes though, even if they make them up to you.

Be aware that if they pay your taxes for you, that's one more source of income on which you will be taxed.

[wallamb]

Thanks Strong Eagle - it's interesting as if i had stayed in a hotel the entire time i would not pay tax on the hotel cost. I guess my company were saving money by moving me into a Serviced Apartment rather than a hotel. Then they surprise me with this information. Gutted as I'm paying a mortgage etc back in the UK. I agree with you - it's whether my company should pay this or me. The way I see it, it's an expense I have occured while working for them in another country. Plus the company put me in one of the most expensive places to stay in SG so it's a significant tax bill as it's calculated on the value of the apartment.

[PNGMK]

Income tax is not an outrageous amount in Singapore. I can't imagine you're "gutted"; just annoyed. How long were or are you working in Singapore? FYI this benefits schedule has been extended quite a bit recently (for example it now includes Dependents School Fees for International School teachers which is a common FOC benefit for IS teachers) and is catching people on both ends - specifically American's who are suddenly liable for benefits here both for US and Singapore Income tax.

[wallamb]

Yes gutted as i didn't factor it in to the costs involved in working in SG. Apartment is SGD 7k a month, not including the cost given to the furniture, which is also taxed. Here for 6 / 7 months in total. If i had known, I personally would have found a much cheaper accommodation in a less expensive area

[Strong Eagle]

It sounds like you have a case of sour grapes because you didn't do your homework and due diligence with respect to the tax consequences of taking the job. Lesson learned... most expats only make that mistake once and become acutely aware of tax consequences of working anywhere.

As I noted, you can ask your employer to cover the tax. IRAS has a publication on that item.

https://www.iras.gov.sg/IRASHome/upload ... %20TOT.pdf

Computation of benefits for housing is actually fairly complicated. See

https://www.iras.gov.sg/IRASHome/Busine ... -Benefits/

for more information.

BTW, you made the statement:

it's interesting as if i had stayed in a hotel the entire time i would not pay tax on the hotel cost

Be clear, you are not paying tax on the cost of your accommodations, hotel or otherwise, you are being taxed on the additional accommodation allowance provided by your company. Had they paid your for a hotel room, you'd be taxed on that as well. And in the case of the hotel room, it wouldn't matter if you paid it and got reimbursed via an allowance or the employer pays it directly... it's still income to you.

And I agree with PNGMK... you are a long way from being "gutted".

[PNGMK]

At the very top rate of 22% you're looking at $1540 a month additional tax due to the accommodation but are you in the top bracket (i.e. earning over $320,000 p.a and FY 2017) or 15% flat if you're a none resident . Are you sure you're calculating this correct? There are very few deductions for income tax in Singapore unfortunately. If it's not too late why not move out now?

https://www.iras.gov.sg/irashome/Indivi ... Tax-Rates/

[Strong Eagle]

If it's not too late why not move out now?

Indeed, that's the whole point of Serviced Apartments... short term, no lease accommodations.

He could move into a semi-D shared home environment for much less money and get many benefits for same.

If this were to happen, would his company cut back the housing allowance, and thus the tax he has to pay? Or, would he simply end up with a net increase in take home pay, thereby making the tax situation more palatable?