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SPR moving to HK, package consultant

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neconomist
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SPR moving to HK, package consultant

Postby neconomist » Sat, 15 Feb 2014 10:51 am

Hi,
I've been asked by my company to relocate to HK, however I'd like to keep my PR in Singapore, which means been paid mostly in Singapore and also to retain CPF contributions.
Do you know any tax/cpf conultant which could help me to verify whether my company is offering me a good tax/cpf equalization? I would like to do some personal homework in order to prove which kind of expact contract is more convenient for me.

Cheers

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Postby beppi » Sat, 15 Feb 2014 7:53 pm

As far as I know, keeping your PR (or rather renewing your Re-entry Permit) requires living and working in Singapore, not just paying CPF (income tax is anyway not due on salary for work abroad). The authorities can see all your entry/exit data and thus how much time you actually spend in Singapore. Check with ICA whether what you plan to do really allows you to renew your RP - I think not!

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x9200
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Postby x9200 » Sat, 15 Feb 2014 9:50 pm

If he will be paid in Singapore meaning able to provide tax assessments for that period then I don't think he will have REP refused.

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Postby neconomist » Sun, 16 Feb 2014 12:22 am

My company HR checked with ICA and seems it also depends from my scope of work, hence how is prepared my contract (e.g. If My work is done in hk yet it benefits the singaporean parent company..).
That is why I would rather get someone who is expert in SG and HK tax/employment regulations.

Do you think it's better to ask some recruit company or going straight to a tax consultant (maybe Big 4?)

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Postby x9200 » Sun, 16 Feb 2014 9:15 am

Your way of thinking is in principle fully reasonable but there is one problem with it: I really doubt you will find anybody with any solid expertise in this subject. From the opinions prevailing also in this forum it seems that ICA is strongly against engagement of any experts / lawyers in the immigration matters. It is of course legal, but the side effect of this alleged attitude is that there are probably no such experts (in the true sense of this word) around.

In other words, it is very likely you will find someone willing to help for some nice chunk of money but at the end of the day his opinion will be just an opinion worth possibly less than your own findings.

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Postby neconomist » Mon, 17 Feb 2014 12:03 pm

I think I'll just wait to see an offer from my company and then from there will make my own analysis (already made some comparison and apparently taxations are higher in HK being there less progressive rates...). If I need to prove my findings are correct I might need to pay someone to say the same things but using a nice letterhead..this would work more for an internal-negotiation.

Thanks anyways for your opinions :wink:

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Postby stiwi » Wed, 19 Feb 2014 5:34 am

That's an interesting example. Keeping PR while not living in Singapore. It would be interesting to see ICA rejecting REP considering non resident in question is able to provide tax returns :)

There is one issue to consider I think, as a non resident PR receiving employment income in Singapore, you would be taxed on non resident tax rates which is 15%.

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Postby beppi » Wed, 19 Feb 2014 3:30 pm

A PR (=permanent resident) is resident by definition.
But income for work outside of singapore is not taxable in Singapore, even if your Singapore employer sends you abroad for a few months. I've been there and done that!

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Postby stiwi » Wed, 19 Feb 2014 3:50 pm

beppi wrote:A PR (=permanent resident) is resident by definition.
But income for work outside of singapore is not taxable in Singapore, even if your Singapore employer sends you abroad for a few months. I've been there and done that!


Are you saying that PR is considered for tax resident rates regardless of his presence in Singapore? Say SPR might live 5/5 of his REP outside of Singapore and still pay resident taxes despite not having permanent home in Singapore? I don't think so.

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Postby sundaymorningstaple » Wed, 19 Feb 2014 4:09 pm

There key words here are "a few months" not 5/5.

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Postby stiwi » Wed, 19 Feb 2014 4:12 pm

sundaymorningstaple wrote:There key words here are "a few months" not 5/5.


Yes, this is something OP didn't precise. But what I am saying is that PR is not a (tax) resident by definition :)

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Postby beppi » Wed, 19 Feb 2014 4:28 pm

Yes, my understanding (please confirm with IRAS) is that non-resident rates NEVER apply to PRs because they are resident by definition.
I am sure this applies for stays abroad from 6 months to 18 months. I haven't tried longer or shorter periods, but as far as I know there is no rule about the duration.
In any case (I repeat myself) salary for work abroad is not taxable in Singapore, thus in stiwi's example the PR would not get taxed here on income for work abroad (he might have a tax liability in the other country, though). If he also has local income (e.g. rent, or business), this would be taxed at local resident rates.

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Postby neconomist » Wed, 19 Feb 2014 4:34 pm

It happened to me some time ago (not PR yet though) to be subjected to the flat 15% tax. Then I had to provide proof to have been in Singapore more than 182 days in the previous Fiscal Year. In fact, I went to IRAS and showed them my passport..

As per IRAS website, the concept of tax resident does not imply a different treatment for PRs (being them in Singapore or somewhere else).

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Postby stiwi » Wed, 19 Feb 2014 5:22 pm

According to:
http://www.iras.gov.sg/irashome/page04.aspx?id=1190

"You will be treated as a tax resident for a particular Year of Assessment (YA) if you are a :
• a Singaporean who normally resides in Singapore except for temporary absences; or

• a Singapore Permanent Resident (SPR) who has established your permanent home in Singapore; or

• a foreigner who has stayed / worked in Singapore (excludes director of a company) for 183 days or more in the year before the YA.
"

I understand that overseas income is not taxable in Singapore and it might be subject to taxes elsewhere.

So if there is SPR residing overseas but receiving Singapore sourced salary, is he considered local tax resident and can enjoy lower taxes or he has to pay 15% non resident taxes?

Does it mean that citizens and PRs are always considered as local tax residents for local salary received within Singapore, regardless of 183 days rule?

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Postby beppi » Wed, 19 Feb 2014 6:36 pm

stiwi wrote:So if there is SPR residing overseas but receiving Singapore sourced salary, is he considered local tax resident and can enjoy lower taxes or he has to pay 15% non resident taxes?

It is not clear what you mean by "Singapore sourced salary".
If the salary is paid for work overseas, and this work is not incidental to employment in Singapore (e.g. business trips or overseas training are incidental, secondment is not), then it is not taxable in Singapore, regardless of where and how it is paid - merely being paid in Singapore does NOT make you tax-liable here (that is exactly the constellation I had before).

If it is incidental to Singapore employment, it is normally taxed at resident tax rates.
I believe it would be very difficult to construct a case where a PR has permanently left Singapore (and thus could be treated as non-resident for tax matters) but still receives income that is incidental to an employment here - but if you find such a case, please ask IRAS how it is treated.


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