Leaving Singapore - Tax Due...

[fac201]

Hi - I have a question on tax liability should i leave Singapore.

If i leave my pension fund will be paid back to me in a lump sum... Is that added to the current years salary to give me final tax bill during clearance...?

If so, does that mean it’s better to leave at the start of the year than the end… For example..

Leave in November – Tax based on 11 Months’ Salary + Pension = High Tax
Leave in January – Tax Based on 0 Months’ Salary + Pension = Lower Tax

[sundaymorningstaple]

What pension fund? Are you a PR or Singaporean?

https://www.iras.gov.sg/irashome/Indivi ... ributions/

[fac201]

Neither. I'm EP. The pension is a work one and everything they have paid in will be returned to me when i leave Singapore. Minus the tax.

[sundaymorningstaple]

By rights the taxes should have been paid as it was contributed as it is not a deductible contribution and should have been treated as income at the time. However, depending on how it is treated by the employer at the time of reimbursement could be a benefit if paid in January. One thing is pretty much for sure, if it is taxed in January, depending on what kind of amounts we are talking about, it probably will not be taxed in a higher tax bracket than in December after a full year of earnings. Therefore I'd probably try to get it paid in January and have let the employer give you the net after IRAS tells them the amount to deduct for your YA2020 tax bill on the IR-21. If they base it as a monthly amount that should have been taxed in the two previous years, you might have a sizeable tax bill. If they tax it in December, depending on you tax rate, if it's two years worth of contributions, it could theoretically raise your tax bill even more as they might amend your previous returns to add it into the proper years. Hopefully your CFO is a pretty creative chap.

[The Ref]

I have cleared tax twice and had Pension cashed in 3 times.
I am PEP/EP holder and get "CPF equivalent" which is taxed as you go - it is clearly itemised on the payslip. As a "non PR/SC" you cant get paid into CPF which (ignoring optional personal SRS) is the only tax free option. Therefore it is Tax Free when encashing it and therefore does NOT impact the tax.

SRS is another story but if you had this you need to insi=tigate it and manage it yourself.