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Freelancing from sg with foreign entities only

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Strong Eagle
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Re: Freelancing from sg with foreign entities only

Postby Strong Eagle » Mon, 11 Mar 2019 11:35 am

little chicken wrote:Hello -thanks for your help here. I guess I have then to drop my current LOC with my current employer and see whether they will be willing to hire me as consultant to do the same job... do you know whether there is any advantage of doing such a thing for an employer? ( I guess beside not being part of their quota).
Another question (sorry if I abuse of your patience) - is it possible for my husband to create a business entity to get me a LOC? Thanks!!!!


If you have DP, then that means your husband is EP. Your husband is prohibited from working for a second company (unless he has a PEP), and that includes his own company. Therefore, he could form a private limited as a shareholder but not serve as director.

I don't understand your other question. Are you asking if the company that has you on LOC would hire you as a contractor, with your own company handling the LOC or EP, then I can't really see how it would make much difference to them. There are no salary requirements for LOC, nor fees associated, so it would be a wash to pay you as employee versus contractor.

You would have the more complicated task of forming a company/business and getting a work permit.

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Re: Freelancing from sg with foreign entities only

Postby little chicken » Mon, 11 Mar 2019 12:16 pm

Thanks a lot! Super helpful and clear. Have a great day

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Re: Freelancing from sg with foreign entities only

Postby tiktok » Mon, 11 Mar 2019 9:14 pm

Regarding income tax payable in the case of providing services for an offshore entity, my non-expert understanding is that no tax is payable.

The reason I believe this is because for the past few years I've been in the same situation in Hong Kong and paid zero income tax, and confirmed this was 100% legit with the hk tax department. Having just moved to Singapore I very much hope a similar arrangement exists here.

According to the sg government: "Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable, except in some circumstances."

More here: https://www.iras.gov.sg/irashome/Indivi ... at-is-Not/

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Re: Freelancing from sg with foreign entities only

Postby Strong Eagle » Mon, 11 Mar 2019 9:29 pm

tiktok wrote:Regarding income tax payable in the case of providing services for an offshore entity, my non-expert understanding is that no tax is payable.

The reason I believe this is because for the past few years I've been in the same situation in Hong Kong and paid zero income tax, and confirmed this was 100% legit with the hk tax department. Having just moved to Singapore I very much hope a similar arrangement exists here.

According to the sg government: "Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable, except in some circumstances."

More here: https://www.iras.gov.sg/irashome/Indivi ... at-is-Not/


Your understanding is not correct. In general, for earned income, the worldwide approach is that you are taxed on the money you earn by working in the country in which you have your legal residence and domicile. Therefore, if you are legally residing in Singapore, you pay taxes in Singapore. This is true even if you were to travel and work in another country for some period of time. The travel is incidental to your employment.

Now, if your company were to second you to another country and you work for another company or the foreign subsidiary of your company, then your income is not taxable in Singapore because the presumption is that it IS taxable in the country in which you are working. Governments want you to pay tax somewhere. Example: I work for Dell SG. Dell transfers me for two years to Dell Malaysia. I now pay Malaysian income tax.

This clause is not applicable to little chicken.

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Re: Freelancing from sg with foreign entities only

Postby PNGMK » Tue, 12 Mar 2019 6:46 am

HK is a zero income tax country hence why it has that qualification.
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Re: Freelancing from sg with foreign entities only

Postby little chicken » Tue, 12 Mar 2019 8:18 am

Hello again - one question on the tax. My company is in France where the income tax is taken at the source. So I already pay taxes there. Does it mean double taxation then?
Thanks!

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Re: Freelancing from sg with foreign entities only

Postby PNGMK » Tue, 12 Mar 2019 8:53 am

little chicken wrote:Hello again - one question on the tax. My company is in France where the income tax is taken at the source. So I already pay taxes there. Does it mean double taxation then?
Thanks!


Is there a dual taxation treaty between Singapore and FR?
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Re: Freelancing from sg with foreign entities only

Postby little chicken » Tue, 12 Mar 2019 9:05 am

There is one, I found it on the IRAS
https://www.iras.gov.sg/irashome/upload ... 0(Ratified)%20(1%20Jun%202016).pdf

But I have no idea what it means for me!

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Re: Freelancing from sg with foreign entities only

Postby PNGMK » Tue, 12 Mar 2019 9:30 am

It means you can avoid dual taxation. You need to follow specific procedures but you effectively show you paid the tax in France which reduces (or completely negates) any tax due in Singapore. Talk to IRAS - they are very helpful. By the ways this is a great benefit - not every country has this arrangement with Singapore.
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Re: Freelancing from sg with foreign entities only

Postby little chicken » Tue, 12 Mar 2019 10:21 am

Thanks a lot!!! for some reasons I find it impossible to read those official documents.

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Re: Freelancing from sg with foreign entities only

Postby Strong Eagle » Tue, 12 Mar 2019 11:02 am

little chicken wrote:Hello again - one question on the tax. My company is in France where the income tax is taken at the source. So I already pay taxes there. Does it mean double taxation then?
Thanks!


Like PNGMK said, you're going to need to go through the dual taxation treaty with a fine tooth comb to ensure that you get your status correct. My understanding is:

a) Your business is domiciled in France, therefore any business profits will be paid in France.

b) You are a legal resident of Singapore, it is your current permanent home; therefore, you will pay personal income tax in Singapore.

Now, I thought I made a mistake once, but it turned out I was wrong. Therefore, you should definitely contact a French accountant to get a correct interpretation of the tax law from the French side. I believe I've got it right from the Singapore side, but of course, if you paid less overall tax by paying everything in France, that would be advantageous.

And what constitutes "business profits" might depend on the legal vehicle of the business. For example, a corporation could pay you a salary which would reduce profits in France and give you a taxable income. However, if a sole proprietorship, at least in the USA, all earnings from the business go directly to personal income tax... no differentiation between a salary and SP profits. You need to understand this bit in France.

Here's a link which makes the treaty a bit simpler.

https://www.guidemesingapore.com/busine ... eaty-guide

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Re: Freelancing from sg with foreign entities only

Postby tiktok » Tue, 12 Mar 2019 4:05 pm

PNGMK wrote:HK is a zero income tax country hence why it has that qualification.


Huh? Yes there definitely is income tax in Hong Kong. I also worked there as a regular employee, during which time I paid income tax. It's more or less a flat 17% with generous rebates.

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Re: Freelancing from sg with foreign entities only

Postby tiktok » Tue, 12 Mar 2019 4:47 pm

Just had a chat with IRAS who pointed me to this link: https://www.iras.gov.sg/irashome/Indivi ... Employers/

And told me based on this, yes, I will need to pay tax.

However the condition is that services must be "rendered in Singapore". In my case I do IT work purely on servers outside of Singapore. So maybe I can get out of it...

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Re: Freelancing from sg with foreign entities only

Postby PNGMK » Tue, 12 Mar 2019 6:36 pm

tiktok wrote:
PNGMK wrote:HK is a zero income tax country hence why it has that qualification.


Huh? Yes there definitely is income tax in Hong Kong. I also worked there as a regular employee, during which time I paid income tax. It's more or less a flat 17% with generous rebates.


My mistake. I was thinking of a long time ago.
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Re: Freelancing from sg with foreign entities only

Postby tiktok » Tue, 12 Mar 2019 9:27 pm

1940 to be exact :)


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