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.
