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Inc Tax - I work in another country, but employed by SIN com

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Halas
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Inc Tax - I work in another country, but employed by SIN com

Postby Halas » Fri, 28 Nov 2014 3:58 pm

Hi Experts,

Greetings!
I need your advice.
I will be employed by a Singapore based company, but my work location will be in an EU country, continuously for 2 years. During this period, can I be on an EP in Singapore.
Part of my salary will be paid in Singapore and the remaining in the EU country.

If I am on EP -
1. Is this legal?
2. If legal, how will this affect the company hiring me in Singapore?
3. Do I need to Pay Income tax on my salary paid in Singapore? If yes, is it the standard rate of tax.
4. Do I also need to pay tax on the part of the salary paid in the EU country?
5. Will the EP expire or become invalid if I continuously reside in another country?

It'd be helpful if you could provide any links to all/any of my queries.

Thanks in advance for your time and response.
Regards.
Hal

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Re: Inc Tax - I work in another country, but employed by SIN

Postby beppi » Fri, 28 Nov 2014 4:12 pm

There is no point having a Singapore EP if you do not work and reside there. But if you do have one, I suppose you'd have to tax your income there. Tax rates are low.
Most EU countries tax residents on their world income - unless a bilateral tax treaty specifies otherwise this may lead to double taxation. Many EU countries have such treaties with Singapore.
This is a very complicated topic and you are well advised to look for an experienced international tax consultant before you decide anything!

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Re: Inc Tax - I work in another country, but employed by SIN

Postby zzm9980 » Sat, 29 Nov 2014 4:18 am

beppi wrote:Most EU countries tax residents on their world


Really? I always thought the only western nation doing this was the US. Many articles and posts here have led me to believe this.

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Re: Inc Tax - I work in another country, but employed by SIN

Postby Strong Eagle » Sat, 29 Nov 2014 8:52 am

zzm9980 wrote:
beppi wrote:Most EU countries tax residents on their world


Really? I always thought the only western nation doing this was the US. Many articles and posts here have led me to believe this.


I thought so, too... but reviewing a couple of countries tax codes, perhaps not. OTOH, all of them have tax treaties with Singapore and in those cases, foreign earned income is indeed excluded.

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Re: Inc Tax - I work in another country, but employed by SIN

Postby beppi » Sat, 29 Nov 2014 9:13 pm

Strong Eagle wrote:
zzm9980 wrote:
beppi wrote:Most EU countries tax residents on their world


Really? I always thought the only western nation doing this was the US. Many articles and posts here have led me to believe this.


I thought so, too... but reviewing a couple of countries tax codes, perhaps not. OTOH, all of them have tax treaties with Singapore and in those cases, foreign earned income is indeed excluded.

Common misconception here:
There is a difference between taxing CITIZENS no matter where they reside (the USA does this, but almost no other country) and taxing RESIDENTS on their world income (many countries, especially in Europe, do this).
The general rule (except for the USA) is: You pay tax where you live, regardless of citizenship.

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Re: Inc Tax - I work in another country, but employed by SIN

Postby sundaymorningstaple » Sat, 29 Nov 2014 10:09 pm

Beppi, that's the way I've always understood it.

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Re: Inc Tax - I work in another country, but employed by SIN

Postby Strong Eagle » Sun, 30 Nov 2014 7:01 am

Halas wrote:Hi Experts,

Greetings!
I need your advice.
I will be employed by a Singapore based company, but my work location will be in an EU country, continuously for 2 years. During this period, can I be on an EP in Singapore.
Part of my salary will be paid in Singapore and the remaining in the EU country.

If I am on EP -
1. Is this legal?
2. If legal, how will this affect the company hiring me in Singapore?
3. Do I need to Pay Income tax on my salary paid in Singapore? If yes, is it the standard rate of tax.
4. Do I also need to pay tax on the part of the salary paid in the EU country?
5. Will the EP expire or become invalid if I continuously reside in another country?

It'd be helpful if you could provide any links to all/any of my queries.

Thanks in advance for your time and response.
Regards.
Hal


After doing more reading, I conclude the following:

a) beppi is correct. If you are resident in an EU country, you will pay income taxes in that country for all income, regardless of where earned.

b) The definition of "resident" is quite broad, ranging from having a permanent residence, to being in the country 183 days, to providing professional services in the country. I judge you will be snared as resident by at least one of the conditions.

c) You might be able to get a Singapore EP, but probably not because you are a foreigner who is not working in Singapore. Where the company is incorporated is irrelevant. Lots of Singapore companies hire personnel outside the country... none of them are on EP's in Singapore because they are either citizens or on work permits in the country in which you are working. You are not working at a job in Singapore = no EP.

d) Even if you did get an EP, it would make zero difference to your tax situation. Singapore citizens, PR's and EP's who are working long term overseas do not pay any income tax. The presumption is that you already pay it in your country of residence.

e) If for some oddball reason, Singapore decided to apply income tax to you, the tax treaty would come into effect, but its effect would be that Singapore tax would be cut to zero because you pay tax in your resident country. All these tax treaties work the same way... if you are paying tax in your resident country, you don't pay tax in your non-resident country. You can't make it work the other way around just because you happen to have a Singapore EP.

f) For the purpose of EU and Singapore tax law, it doesn't matter where you are paid. You can be paid into a Singapore bank account and not owe any Singapore tax if you earned your income overseas. Similarly, just because you did put your money in a Singapore bank does not mean it is excluded from taxation in an EU country.

Bottom line: EP is a waste of time. You pay EU tax rates because you live and work there. You don't pay Singapore tax because you don't live and work in Singapore.


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