But theres an exception for PRs:Tax Clearance is a process of ensuring that your non-citizen foreign employee pays all his taxes when he ceases employment with you in Singapore or plans to leave Singapore for more than three months. Tax clearance obligations apply to all work pass holders including PEP holders.
As an employer, it is your responsibility to notify IRAS and seek tax clearance for the affected foreign employees.
But then tax clearance is based on your Actual income earned in your previous job and not based on estimated income for the whole year. What you are saying is indeed very strange and I haven't heard about.Tax Clearance is not required for:
Singapore Permanent Residents (SPR) who are not leaving Singapore permanently after they have ceased employment with you. This administrative concession does not apply to overseas postings. You may obtain a Letter of Undertaking (28KB) from the SPR employee if he has no intention to leave Singapore permanently at the point of cessation of employment with your company.
Seriously WD40's post made more sense than this above.sundaymorningstaple wrote:They are doing the same thing they do for companies. Estimated taxes. This is normal in the US as well. Especially for high income earners. It allows to to base your current years taxes on the previous years tax liability so as to easy the tax bite all at one time in August or September. It can be paid via GIRO setup as well.
SMS has a point. In States (and many other countries including Singapore) independent contractors and businesses must pay a quarterly estimated tax based on the previous year's income. In US (and many other countries, but not including Singapore) the employer is required to withhold payroll taxes on each paycheck which are offset against tax due at the end of the year. In Singapore the employer has no obligation to withhold payroll taxes and IRAS normally sends a bill at the end of the year. Withholding payroll taxes serves 2 purposes, one so the payer is not hit with a one time high tax bill (particularly important in US with its lower saving rate) and secondly (probably more importantly) so the government budget gets its spending money sooner without having to pay a few months of interest. Singapore may be changing rules for certain higher income earners in that respect.PNGMK wrote:Seriously WD40's post made more sense than this above.sundaymorningstaple wrote:They are doing the same thing they do for companies. Estimated taxes. This is normal in the US as well. Especially for high income earners. It allows to to base your current years taxes on the previous years tax liability so as to easy the tax bite all at one time in August or September. It can be paid via GIRO setup as well.
Why would I be hit with estimated taxes when the tax year is not done?
What on earth does the second last sentence mean?
Why would I care about GIRO when I normally pay my tax in a single payment?
Why would I need to prepay taxes as though I'm leaving the country when I'm a PR with millions of $ of assets in the country?
What I don't understand is why after 20 years of PR and multiple jobs I suddenly need tax clearance when changing jobs. Maybe I crossed a salary threshold (around 20k per month) but it's still the first time I've heard of a PR needing this.
Surprised? Have you never lived in Singapore?earthfriendly wrote:I am surprise payroll tax is not deducted from each paycheck in SG. How do they make projection for how much tax they will collect for the year?
Most countries USED to be that way until they got on the PAYE/PAYG drug and can't wean themselves off it.earthfriendly wrote:I am surprise payroll tax is not deducted from each paycheck in SG. How do they make projection for how much tax they will collect for the year? In US, you make an estimated payment from each paycheck. When year end comes around, you calculate your tax liability for the year. And you will either end up with a refund (from overpayment) or pay any balance that is due.
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