looking for help with 2 contract topics

[ts1978]

I’m looking for a bit of help with my upcoming contract negotiation. I’ve been in Singapore for a number of years already, but there are several elements involved in this contract I haven’t dealt with before.
Context: the role is CEO of a technology firm operating globally on the smaller end of the mid-sized company scale (just under $50m turnover)

Health insurance:

I’ll continue to be based in Singapore, but my company’s physical presence is not substantial here. As a result, there is no group health insurance plan in place. I have two options: either the company procures a comprehensive medical/dental insurance plan for me (no spouse/kids) or I will organize this for myself and take the approximate amount as additional salary. I'm not a PR and have no medical benefits stemming from the CPF program.


Question: at (approximately) what should I value this benefit per annum? Would the company enjoy any tax breaks by organizing this for me on my behalf as a deductible? Would this benefit be taxable for me personally as it would if I took it in additional salary?

Convertible Notes

I’m being offered equity participation in the company through a convertible note scheme, denominated in AUD$. I’m already aware that this will involve a 10% withholding in Australia for the interest payments. Would I incur additional taxes on these interest payments in Singapore?

Any help on these two topics would be sincerely appreciated.

[Strong Eagle]

Since there is no group medical policy, an insurance policy provided to you and paid for by the company is taxable income to you in the amount of premiums paid by the company.

For the company, there is no difference between paying you the cash and paying for your premiums... both are an expense that reduces the bottom line.

I'd lean towards getting the health policy lined up myself as I'd have more control over the company and benefits mix I desire, whereas, if your company does the deal they may have less understanding of the health insurance market and attempt to cut costs.

I can't answer your question about the notes but you might try this page for additional info. http://www.iras.gov.sg/irasHome/page04.aspx?id=2890

[ts1978]

Since there is no group medical policy, an insurance policy provided to you and paid for by the company is taxable income to you in the amount of premiums paid by the company.

For the company, there is no difference between paying you the cash and paying for your premiums... both are an expense that reduces the bottom line.

I'd lean towards getting the health policy lined up myself as I'd have more control over the company and benefits mix I desire, whereas, if your company does the deal they may have less understanding of the health insurance market and attempt to cut costs.

I can't answer your question about the notes but you might try this page for additional info. http://www.iras.gov.sg/irasHome/page04.aspx?id=2890

Thanks Strong Eagle.

To update anyone in the future looking at this thread in a search: the answer to whether interest payments from a foreign-sourced convertible note are further taxable in Singapore prior to converting this debt instrument into ordinary shares is "probably not". This is the case when there is a withholding tax in the country of origin. If there is no withholding tax, these payments are "probably" taxable.

However, my tax adviser is confirming this with IRAS and I'll update the thread if the answer changes.

[x9200]

Question: at (approximately) what should I value this benefit per annum?

I would try to ask for something around 15k. There are some very good and comprehensive Bupa plans around that number. If you feel this is too much, then some reasonable plans start at around 6-7k (subject to your age) all inclusive (100% coverage world-wide).

[ts1978]

Question: at (approximately) what should I value this benefit per annum?

I would try to ask for something around 15k. There are some very good and comprehensive Bupa plans around that number. If you feel this is too much, then some reasonable plans start at around 6-7k (subject to your age) all inclusive (100% coverage world-wide).

Thanks x9200. I signed the new contract yesterday and $6K pa was added to base salary.