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IRAS Letter of guarantee - new to me!

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PNGMK
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IRAS Letter of guarantee - new to me!

Postby PNGMK » Thu, 05 Jun 2014 10:33 am

Well this is new. I've been asked by IRAS to forward a letter of guarantee for XXXX from a local bank or established limited company in Singapore.

Which local banks would do this? How do I approach them?

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Postby sundaymorningstaple » Thu, 05 Jun 2014 11:19 am

Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?

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Postby PNGMK » Thu, 05 Jun 2014 11:59 am

sundaymorningstaple wrote:Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?


I guess it's a bond for personal tax for 2015 (similar to with holding the last month pay - but as I am employed by a non Singapore entity they are asking me personally to post the bond).

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Postby zzm9980 » Thu, 05 Jun 2014 12:47 pm

PNGMK wrote:
sundaymorningstaple wrote:Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?


I guess it's a bond for personal tax for 2015 (similar to with holding the last month pay - but as I am employed by a non Singapore entity they are asking me personally to post the bond).


That is odd. I'm assuming you've never been late on your taxes and your current employment arrangement has been ongoing for a while? Could it be another anti-foreigner measure meant to make it slightly less comfortable to stay in SG?

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Postby sundaymorningstaple » Thu, 05 Jun 2014 12:48 pm

So you are working in Singapore for an offshore company that does not have a registered entity in Singapore? Okay, I can see the need for that. As they don't have PAYE set up here and only have a PAYAT system, they are wanting to just make sure that they get theirs. I think I'd still approach your bank or maybe Maybank (I don't know how much / far they will go with their bonds) but your regular banker might be able to sort it out. Check with your relationship manager.

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Postby yogaloungeforever » Thu, 05 Jun 2014 12:51 pm

No it's not odd. I have been personally asked to post a bond when my last employer left me in the ditch with unpaid sky-hi taxes. Worse still, they blocked my exit out of the country until the bond is presented
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Postby PNGMK » Thu, 05 Jun 2014 9:45 pm

I'm currently transitioning to a local entity (due to a merger). I rang IRAS and explained it and they suggested a letter might get them to waive the requirement. It just seems odd that they didn't care in the last two years. I guess too many people disappearing and not paying their taxes.

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Postby Strong Eagle » Thu, 05 Jun 2014 9:49 pm

PNGMK wrote:
sundaymorningstaple wrote:Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?


I guess it's a bond for personal tax for 2015 (similar to with holding the last month pay - but as I am employed by a non Singapore entity they are asking me personally to post the bond).


I'm curious... if you are employed by a non Singapore entity, which Singapore entity has your EP?

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Postby sundaymorningstaple » Thu, 05 Jun 2014 10:17 pm

Hmmmmm. PEP?

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Postby PNGMK » Thu, 05 Jun 2014 10:36 pm

Strong Eagle wrote:
PNGMK wrote:
sundaymorningstaple wrote:Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?


I guess it's a bond for personal tax for 2015 (similar to with holding the last month pay - but as I am employed by a non Singapore entity they are asking me personally to post the bond).


I'm curious... if you are employed by a non Singapore entity, which Singapore entity has your EP?


I'm a PR lah... one very, very good (and maybe the only) reason to be a PR is you don't need a local entity to hire you AND you can then claim a tax rebate....

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Postby sundaymorningstaple » Thu, 05 Jun 2014 11:40 pm

I thought you were a PR but couldn't be bothered to search all those posts to find out! :P

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Postby Strong Eagle » Fri, 06 Jun 2014 1:02 am

PNGMK wrote:
Strong Eagle wrote:
PNGMK wrote:
sundaymorningstaple wrote:Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?


I guess it's a bond for personal tax for 2015 (similar to with holding the last month pay - but as I am employed by a non Singapore entity they are asking me personally to post the bond).


I'm curious... if you are employed by a non Singapore entity, which Singapore entity has your EP?


I'm a PR lah... one very, very good (and maybe the only) reason to be a PR is you don't need a local entity to hire you AND you can then claim a tax rebate....


Ahh, yes... quite surprising then that they have come at you at this late date.

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Postby PNGMK » Fri, 06 Jun 2014 9:24 am

Strong Eagle wrote:
PNGMK wrote:
Strong Eagle wrote:
PNGMK wrote:
sundaymorningstaple wrote:Is it for a license or a bond? If so, you can always go to a bank and purchase an "insurance" whereby the bank will indemnify or guarantee the amount . Similar to what is usually done with the bond for a maid. We used to get these in the recruitment business whereby as the owner of an agency, we had to furnish a $20K bond. Where got that kind of money to tie up, so get a banker's (I used Maybank at the time) which cost me a couple of hundred a year. Is this what you are talking about?


I guess it's a bond for personal tax for 2015 (similar to with holding the last month pay - but as I am employed by a non Singapore entity they are asking me personally to post the bond).


I'm curious... if you are employed by a non Singapore entity, which Singapore entity has your EP?


I'm a PR lah... one very, very good (and maybe the only) reason to be a PR is you don't need a local entity to hire you AND you can then claim a tax rebate....


Ahh, yes... quite surprising then that they have come at you at this late date.


Yes - seemed a bit strange to me as well.

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Re: IRAS Letter of guarantee - new to me!

Postby CAtoSing » Tue, 03 Mar 2015 6:50 pm

Hi

Just wanted to comment on this as I just went (going) through this now.

I too got this letter. I'm on EP and my company covers housing, kid's school and health insurance. All of this gets added to my "income" so my tax ended up being quite high. My first attempt was to get the Letter of Guarantee from my bank (Citibank). I went to the branch near Raffles Place this morning and after many confused looks from their staff, they concluded they couldn't offer me the letter even though I have an account there because "they are not a local bank".

Ok. Strange. So I went to DBS. Similar confused looks, but less than Citibank. After some back and forth, customer service lady explained that I had to open a fixed deposit account (i.e. they will hold my money without me getting to use it) and they would charge between 1% and 1.5% of total advance tax amount. I said, thanks but no thanks. As my tax is high, even 1% is not pocket money.

Then as I walked passed a Maybank, I said, third time is the charm. More confused looks from their staff, but then eventually figured out it was the same as DBS.

Bottom line, I gave up and will soon write a fat check to IRAS so they can sit on my money and hopefully refund some of it next April... :x


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