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Tax/Business/DP/freelance question

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HaleyF
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Tax/Business/DP/freelance question

Postby HaleyF » Fri, 27 Jun 2014 7:27 pm

Hi there, long time lurker, first time poster :) You guys are awesome and I was hoping to get some advice.

So I'm Canadian, living in Singapore on a Dependent Pass (my husband has a job). Before moving here I was working in the US and have retained some of my freelance clients (I do web/product design). I was getting paid under the table there, but now that I don't have a day job they want to increase my workload and are worried about explaining to the IRS what all those personal gifts are for haha.

I'm not really sure how to legally set this up. I know Canada doesn't care about my income. I assume because I'm living in Singapore, I pay taxes here and not to the US, correct? To work legitimately here it looks like I need to register with ACRA, however, I found some language saying I didn't need to if I worked less than 60 days per year. What if I make under the $3300 a month? I only ask because I'm not sure I'd actually make that much every single month. The work has been crazy some months, and 0 others. I'm not looking to make a full-time job out of this, it's just a side gig I occasionally do.

I'd like to deposit the money into my American bank account if that makes any difference. Would the IRS tax me for keeping a nominal amount in an account there?

Thank you guys so much for any advice!

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sundaymorningstaple
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Postby sundaymorningstaple » Fri, 27 Jun 2014 8:45 pm

If you are a Canadian and you are here in Singapore, it matters naught that you have US clients as your money is being earned in another country (Unless you are holding a green card or are otherwise still liable to the US (dual citizen?) or are holding a valid US employment Pass while here in Singapore. But one thing is certain, the 60 days you speak of means working/residing here for more than 60 consecutive days in any calendar year. Not 60 scattered around the calendar.

Having said all that, I'll let others advise you on the ins & outs of working from home and the legality of same.

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Postby HaleyF » Fri, 27 Jun 2014 8:53 pm

Thanks for clarifying the 60 days thing :)

I have no legal ties to the US since leaving, besides my husband, who is American. No green card or anything.

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Re: Tax/Business/DP/freelance question

Postby Strong Eagle » Sun, 29 Jun 2014 12:57 am

HaleyF wrote:Hi there, long time lurker, first time poster :) You guys are awesome and I was hoping to get some advice.

So I'm Canadian, living in Singapore on a Dependent Pass (my husband has a job). Before moving here I was working in the US and have retained some of my freelance clients (I do web/product design). I was getting paid under the table there, but now that I don't have a day job they want to increase my workload and are worried about explaining to the IRS what all those personal gifts are for haha.

I'm not really sure how to legally set this up. I know Canada doesn't care about my income. I assume because I'm living in Singapore, I pay taxes here and not to the US, correct? To work legitimately here it looks like I need to register with ACRA, however, I found some language saying I didn't need to if I worked less than 60 days per year. What if I make under the $3300 a month? I only ask because I'm not sure I'd actually make that much every single month. The work has been crazy some months, and 0 others. I'm not looking to make a full-time job out of this, it's just a side gig I occasionally do.

I'd like to deposit the money into my American bank account if that makes any difference. Would the IRS tax me for keeping a nominal amount in an account there?

Thank you guys so much for any advice!


Although not explicitly stated, I believe the laws are in place to cover your situation. There are two components to your question. First is whether or not you need to have a registered sole proprietorship or company with the ACRA.

My view is that you do not. Registration is required if you are doing business in Singapore. You are not. You are not even displacing any Singapore worker doing the work you are doing.

The second question involves taxation. Tax law is pretty clear that almost all foreign sourced income is not taxable except for "service income" and it is pretty clear that you would be receiving service income from your activities as defined by IRAS: http://www.iras.gov.sg/irasHome/page04.aspx?id=13826

There are exemptions for paying tax on foreign sourced income and the key one is that you must have paid foreign tax on the income. Since your work is being performed in the United States, this would mean that you could be subject to US taxes, and if you are not, then you would be subject to Singapore tax. See http://www.iras.gov.sg/irasHome/uploade ... -05-31.pdf for more information.

Therefore, since I cannot see why one would want to become entangled with US tax law, I'd file Singapore tax returns with your earnings.

You should clarify with both IRAS and ACRA, and by clarify I don't mean to take the word of the first clerk you talk to.

Edit: I reviewed the registration requirements at ACRA and they are fuzzy. On the one hand it says, "Every person, before carrying on business in Singapore, must register ACRA except for those who come under the list of exempted categories under Section 4 of the Business Registration Act, Cap. 32." On the other hand, "carrying on a business in Singapore" is not.

Does that mean being physically present in Singapore while doing overseas consulting work? Or does it mean actually conducting business in Singapore, which you are not? I don't know.

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Postby sundaymorningstaple » Sun, 29 Jun 2014 8:57 am

Additionally, if she was doing this freelance (under the table - her words), regarding US taxes, as she is no longer in the US, then, as a Canadian citizen, shouldn't she be liable for Canadian taxes then? e.g., either Canadian or Singapore taxes as the case may be?

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Postby Strong Eagle » Mon, 30 Jun 2014 3:17 am

sundaymorningstaple wrote:Additionally, if she was doing this freelance (under the table - her words), regarding US taxes, as she is no longer in the US, then, as a Canadian citizen, shouldn't she be liable for Canadian taxes then? e.g., either Canadian or Singapore taxes as the case may be?


Canada is pretty much like Singapore... as long as taxes are being collected somewhere (by tax treaty) then they won't go after collecting tax.

If the OP is working for individuals and not companies, then in the US neither the OP nor the individual would need to file anything so long as the OP has no legal presence in the US.

If she is working for a company but has no legal presence in the US and is not a US citizen, then the company does not have to file a 1099 against her and does not have to withhold tax.

Being that she is neither in Canada, nor in the USA, and that the work will be performed in Singapore, I'd say it is Singapore tax she must pay, and my interpretation of the ACRA rules says that she doesn't need to company or SP to collect offshore money and pay tax on it.


http://statutes.agc.gov.sg/aol/search/d ... %3DactsAll


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