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SG contract but live/work overseas.Problem?

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martincymru
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SG contract but live/work overseas.Problem?

Postby martincymru » Wed, 26 Aug 2015 5:39 pm

I have been offered a job here in Sg with a Sg based contract. EP application next week, they say after I sign the new contract (not yet received).

I have job already, EP.

The new Company has established office in Sg but the work for next 12 months is in Korea. 3 months on 2 weeks off. Salary 14k Sg month.

My question is:
1. any Sg law broken? ( I doubt it 'cos I will be paying Sg tax).
2. will I have to pay tax also in Korea since 90% of the time in next 12 months I will be resident/living/working there?

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Re: SG contract but live/work overseas.Problem?

Postby sundaymorningstaple » Wed, 26 Aug 2015 8:28 pm

Two different sets of rules/ministries in play here (three actually, if you consider ICA as well as you will be transiting through Immigration.

While I cannot find the black & white (I haven't looked as of yet), I believe that you will not pay any income taxes to Singapore even though you receive your money here (Singapore only taxes income that is actually earn IN SINGAPORE). As you are being hired by a Singapore Employer and are on a temporary assignment in Korea, you can still keep your EP as/when the position is finished in Korea, supposedly you will return to work in the Singapore Office.

If you are being paid on a monthly basis, then your income would necessarily have to be prorated between your time in Korea and your time in Singapore (even though you are off in theory but are still employed by the Singapore employer) Bit different if you are on a day rate. Actually, They could have hired you on a offshore contract (signed while you were on the plane to Korea and sent back via courier when you land, and you could have just come to Singapore on a bog stand SVP after every 3 month hitch. That what I did here for the first 11 years in Singapore. I work a 2 month on/one month off rotation (on month off on a SVP in Singapore. The first year I lived in the company's staff house and then I got married to a local so had my own lodging (albeit in her name). I did that for 11 years before taking up a position in Singapore and getting an EP.

The look on the ICA Officer, who gave me my PR interview, was a MasterCard moment when I told him I'd had one Singapore wife, 2 Singaporean children and three Singapore registered cars (and a C & D license) all on Standard 30 day SVPs spanning 11 years. I thought his jaw was going to hit the floor. Never paid any taxes. Never filed a Singapore tax return as I was only a tourist here. ;-)

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Re: SG contract but live/work overseas.Problem?

Postby martincymru » Wed, 26 Aug 2015 8:54 pm

Thanks SMS. I need time to digest & revert.

Anyone else in or been in same boat?

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Re: SG contract but live/work overseas.Problem?

Postby Strong Eagle » Wed, 26 Aug 2015 9:08 pm

What is your visa/permit status in Korea?

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Re: SG contract but live/work overseas.Problem?

Postby sundaymorningstaple » Wed, 26 Aug 2015 9:34 pm

Probably a business visa but if his employer gets him a work visa he'll have to pay (or his employer should actually pay it) income taxes there or the UK or both, I'm guessing. Don't know Korean tax laws.

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Re: SG contract but live/work overseas.Problem?

Postby martincymru » Thu, 27 Aug 2015 10:08 am

strong eagle, I think Visa will be:
"E-5: Professional Employment - This visa is for individuals who hold an international qualification for their profession which is recognized by the Korean government. Examples include law and medicine."

sms: OK EP no problem but what questions will arise where, in 1st quarter 2017, I submit a tax return to IRAS for zero (for year 2016)?

Should I insist that my Employer "covers all local [Korean] taxes" or words to that effect?

Aside, my PR appointment is slated for 20 Feb 2016. It's one reason why I wish to maintain an EP in Singapore. (High salary might influence the outcome, notwithstanding my earlier point about nil tax return).

I'm a bit lost which way to go on this one.

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Re: SG contract but live/work overseas.Problem?

Postby sundaymorningstaple » Sat, 29 Aug 2015 10:36 pm

Martin, I somehow missed this post (latest post thingy) as I think I must have logged on one morning but didn't have enough time to get through everything before I had to run so when I got to the office is didn't show up there. Anyway.

I still feel pretty sure that IRAS uses a different set of guidelines than MOM does with it come to Salary. MOM controls only the work permits. If the company is paying you you salary you meet MOM guidelines even if the company sends you on a temporary assignment for a year. IRAS on the other hand, only taxes people on the income that they earn while physically present in Singapore. Therefore, there is no issue. However, IRAS does stand on the though process that you have to pay income taxes somewhere. So, if you are not paying here or in your home country, the the income taxes will need to be paid to the country you are working in. Normally, the employer pays those taxes and to find out your gross income you need to do a circular calculation to arrive at your total income as the income taxes that are being paid for you, are considered income, as is the income taxes on that, etc, etc, hence the circular calculation down to rounding off at less than one dollar.

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Re: SG contract but live/work overseas.Problem?

Postby Strong Eagle » Sun, 30 Aug 2015 1:05 am

My take: Since you are being paid in Sing $$ for work performed for a Sing company, you will be taxed by IRAS. https://www.iras.gov.sg/IRASHome/Indivi ... Singapore/. Were you to be paid by the foreign company in Korea, then IRAS would expect you to pay taxes in Korea.

Since Korea has issued you an E5 visa, you have the right to work there. Because of reciprocal tax pacts I think it is unlikely that Korea will tax your Sing earnings. You should confirm this. The other thing I would confirm is that you can actually hold the visa without demonstration of some minimum amount of earnings. In Singapore, for example, you must earn a minimum amount to qualify for EP. How does your company intend to handle this?

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Re: SG contract but live/work overseas.Problem?

Postby martincymru » Mon, 31 Aug 2015 2:21 pm

Update: they canceled the position !

Nonetheless it does raise important questions and of course I may be faced with this again in the future.

SMS and Strong Eagle seem at odds (SMS: "must be physically present [working] in SG to be liable for SG taxes" ...... is that strictly correct? ).

I am not going to delve further into this matter since, as said, they withdrew the offer.

Thanks for the advice/comments.

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Re: SG contract but live/work overseas.Problem?

Postby sundaymorningstaple » Mon, 31 Aug 2015 3:22 pm

the problem is neither of us has any direct anecdotal evidence one way or the other, but we both read the various ministries differently. SE from a businessman's POV and a lot of multi-country exposure an I from a purely HR view. I'm not saying I'm right or wrong, but it's just my interpretation of what I have found over the years. As noted, it's a moot point now, but it would be nice to have a more concrete answer to end this thread with for references purposes in the archives.

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Re: SG contract but live/work overseas.Problem?

Postby martincymru » Mon, 31 Aug 2015 4:00 pm

Any Tax experts out there wish to comment ?

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Re: SG contract but live/work overseas.Problem?

Postby sundaymorningstaple » Mon, 31 Aug 2015 5:20 pm

Okay. I will, after closely comparing the differences between locals and foreigners, will have to agree with SE. The deciding factor being the fact that your are, in fact, being paid by the local company and not by the foreign company. Therefore they (IRAS) will consider the overseas employment incidental to your employment - hence you are working for a Singapore company and the overseas stint is part and parcel of your duties with said company. Therefore you will be taxable to IRAS on the whole amount at either resident or non-resident status (depending on the time in Singapore - resident rates in your case).

https://www.iras.gov.sg/IRASHome/Indivi ... Singapore/

https://www.iras.gov.sg/IRASHome/Indivi ... Singapore/

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Re: SG contract but live/work overseas.Problem?

Postby Strong Eagle » Mon, 31 Aug 2015 9:29 pm

sundaymorningstaple wrote:Okay. I will, after closely comparing the differences between locals and foreigners, will have to agree with SE. The deciding factor being the fact that your are, in fact, being paid by the local company and not by the foreign company. Therefore they (IRAS) will consider the overseas employment incidental to your employment - hence you are working for a Singapore company and the overseas stint is part and parcel of your duties with said company. Therefore you will be taxable to IRAS on the whole amount at either resident or non-resident status (depending on the time in Singapore - resident rates in your case).

https://www.iras.gov.sg/IRASHome/Indivi ... Singapore/

https://www.iras.gov.sg/IRASHome/Indivi ... Singapore/


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Re: SG contract but live/work overseas.Problem?

Postby PNGMK » Mon, 31 Aug 2015 10:47 pm

KISS: You should opt, in the future to be paid in the country with the lowest tax regime and establish/maintain tax residency there and not in the other one.

For example Australians living in Singapore being paid in Singapore can work in Australia (a high tax regime) for limited periods if paid in Singapore (a low tax regime) without declaring the income to the ATO but you can rest assured the ATO will grab PAYE tax if they were being paid in Australia from an Aussie entity.
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