dnmrk49 wrote:Dear Community,
I have a question about my situation and our company:
Our company incorporated in Singapore since 2017, at first there was a Nominee Director in Singapore, and I was a normal Director.
August last year, I applied for the EP and was accepted. I requested to change the director, and now I'm the main director, position Executive Director, salary 5,000SGD per month.
I do not stay in Singapore regularly, as I am currently living in the UK for a year. Total days in Singapore are less than 60 days last year.
Question: How do I know about my Tax status/responsibility? Is there any personal income tax responsibility should I aware of?
I was consulted by an Accounting company, which also is helping our company's accounting, that "If such an employee renders part of his services in Singapore, income attributable to services rendered here is taxable in Singapore unless the employment is exercised for not more than 60 days in a calendar year. For employment of 61 to 182 days in Singapore, the employee will be taxed at a flat rate of 15% or the resident rates, whichever gives a higher tax."
May I ask is it true? According to that, my income salary will not be taxable, isn't it?
I hope that someone could help to give me an advice. Thank you!
So, here is your first problem. Unless you have a permanent address in Singapore, you cannot be the normally resident director
Yes, I do have a permanent address in Singapore. I also used that to report to MoM. The address which listed in ACRA Bizfile records is in Singapore.Your tax and employment situation are not nearly so clear. I don’t see how you managed to wangle an EP when you are not living in Singapore. What address are you using with MoM? What address is listed in your ACRA Bizfile records for your place of residence as director?
Yes, I understand this. So, basically, I will be classified as non-resident, I guess.You obviously don’t meet the residency requirements since you’re not living in Singapore. Therefore, even though you have an EP, you will still be classified as non-resident.
I also read about it somewhere on ACRA. And I did ask our accounting agent in Singapore about it, however, they insisted me that they did ask ACRA and they confirm that it was exempted, too. That's why I am confused and need to seek some advice here.This is your second problem. Because you don’t live in Singapore, you are a “non-resident” director, and non-resident directors are subject to special treatment. As you noted, your employment income is exempted from tax if you are here on short-term employment for 60 days or less in a year, but, this exemption does not apply if you are a director of a Singapore company. Therefore, you will pay tax on _all_ income you earn from your Singapore company.
I see. The problem is, because I trust my accounting agent, our company just paid me salaries since August 2018 without reporting or transferring anything to IRAS. As the salaries were 5,000SGD per month, my total income in 2018 was 25,000SGD.You will pay a rate of 22 percent on directors fees, and 15 percent or the resident tax rate, whichever is larger, on regular salary. Further, since you are a non-resident director, these taxes must be withheld from your salary before you receive it. Example: You pay yourself $1000 in directors fees. The company must withhold $220 and send it immediately to IRAS, then send you a check for $780 for the remainder.
Thanks for your information. Yes, I am also a bit worried to extend the EP next July. I'm not in Singapore frequently as I often on business trips year, and later I came to the UK for a short study here. That's why the total day in Singapore of mine is less than 60 days in 2018.The Ref wrote:I am not an accountant, but I think if you have an EP then you are considered a tax resident regardless of time here. That was the case with a friend in a similar position. Your problem is when you try to renew the EP you may get denied if you spend so little time onshore.
The 60 days is for people who work here as of their normal job in the company at another location. E.g. working in HK and spend a few weeks here on a project.
That said, you could ring IRAS with your specific questions but they ask for your NRIC as a very first question
Actually, I trusted our accounting agent (as I also worked with them to handle the process of opening our company in Singapore) when they said that, then I had no time to check again or get in touch with IRAS before. Now, I will ask them more about this issue, if they have any solution. I just want to get some advice from outside, to understand and argue with them, as I am not really familiar with Singapore laws and legal matters with respect to directors.Why didn't you go to the IRAS before, or are you at least in touch with them to see all your options?
Thanks for your information. I feel clearer about this now. So basically, I am a resident in Singapore. The rule 183 days do not apply for me as I have a resident address in Singapore. My tax status is "Resident".In that case, you are tax resident and you are "normally resident". For the purposes of tax residency, time you spend out of the country on business and holidays does not count against your minimum 183 day stay to achieve residency. I essentially lived in KL for 8 months in 2005 while I was on EP, traveling back and forth about once a week. I was resident for tax purposes.
I was also "normally resident". This means that you, as a director, have a physical address in Singapore to which a court summons, notice of appearance, or other legal documents could be delivered to you personally. It doesn't necessarily mean you have to be home at the time of delivery.
I understand now. May I ask just one more question about what the Tax rate would normally apply in my situation? Is that the progressive resident tax rate or a flat rate of 15%?And this means that all the 60 day or less malarkey, and all the less than 183 day, Form M rules don't apply to you at all. You're resident. You pay all your taxes in Singapore.
Dear all, can I submit the Form B1 by myself through IRAS MyTax Portal? The accounting agency is charging a lot for this and I hope I can do it myself.Strong Eagle wrote:You pay the graduated resident tax rate on all income. It doesn't matter whether you pay yourself as directors fees, salary, or bonuses... your tax rate is identical. If you were subject to CPF (you are not), the manner of payment would affect CPF contributions.
I am willing to pay Tax. As I said, this was the problem of YA2019, because I started my EP in the second half of the year and I thought it affects my residency status. I asked because I want to do it right.The Ref wrote: He wants to be treated as a Tax Resident so he can run the company, even though he doesnt live here.
He wants to tell one part of the government (IRAS) he wasnt here for 60 days to minimise his tax
I'm not sure what you mean, but as I mentioned above, I do have a permanent address in Singapore. I co-rented it with my friends and stay there whenever I'm back.He wants to be the "resident director" and he wants to keep his EP by using his mailing address as a "Permanent address" (by not telling MOM he was less than 60 days)
He wants to pick and choose which advice he is given
Yes, I do. Because I think $500 for submitting personal Tax return is really high. Seriously, Singaporian willing to pay that much for a task which as I know, people can do it online in a few minutes?He wants to minimise the costs of paperwork
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