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Tax residency and working remotely, away from Singapore

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theboomboom
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Tax residency and working remotely, away from Singapore

Post by theboomboom » Mon, 16 Nov 2020 1:06 am

Sorry, if this question has been asked, but I searched for quite a bit and couldn't find anything relating to my question.

The pandemic has changed my company's view on having an office, and we have set-out to be a WFH/remote-work company. My company is supportive of anyone working from anywhere, so long it is in a legal way. Given this, I am exploring the idea of being (somewhat) nomadic and working from anywhere. But I am having a hard time fully painting the picture on how I would do that legally.

My situation is that I am on an EP and married to a SC. The company is based in Singapore. Now, to be clear on this, I don't want to avoid paying taxes. If anything, I want to remain a tax resident in Singapore, but be here for only a few months a year. From the IRAS website https://www.iras.gov.sg/irashome/Indivi ... o-Pay-Tax/ I understand that I will be seen as a tax resident if I am in Singapore for >183 days, and otherwise only taxed for any income I have earned in Singapore at a flat rate of 15%. Now,
  • What happens if I have an EP, but I am not in Singapore, at all. Am I still then a tax resident? If not, will I be a tax evader as I won't be a tax resident anywhere else?
  • Same question, but what if I am in Singapore for <183 days? Do I only pay taxes based on the non-resident rate while not being seen as a tax-resident?
  • Are there other ways I can remain a tax resident while being away from Singapore?
Any help, either in the form of answers or directions to whom or which organisation to contact is deeply appreciated so thanks in advance!

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Mon, 16 Nov 2020 9:05 am

Myasis would be the best guy for this. An important point though is not to accidentally end up being tax resident for TWO countries (for example Singapore and Australia) esp. if there is no dual tax treaty in place.
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Re: Tax residency and working remotely, away from Singapore

Post by jamie9vardy » Mon, 16 Nov 2020 11:26 am

theboomboom wrote:Sorry, if this question has been asked, but I searched for quite a bit and couldn't find anything relating to my question.

The pandemic has changed my company's view on having an office, and we have set-out to be a WFH/remote-work company. My company is supportive of anyone working from anywhere, so long it is in a legal way. Given this, I am exploring the idea of being (somewhat) nomadic and working from anywhere. But I am having a hard time fully painting the picture on how I would do that legally.

My situation is that I am on an EP and married to a SC. The company is based in Singapore. Now, to be clear on this, I don't want to avoid paying taxes. If anything, I want to remain a tax resident in Singapore, but be here for only a few months a year. From the IRAS website https://www.iras.gov.sg/irashome/Indivi ... o-Pay-Tax/ I understand that I will be seen as a tax resident if I am in Singapore for >183 days, and otherwise only taxed for any income I have earned in Singapore at a flat rate of 15%. Now,
  • What happens if I have an EP, but I am not in Singapore, at all. Am I still then a tax resident? If not, will I be a tax evader as I won't be a tax resident anywhere else?
  • Same question, but what if I am in Singapore for <183 days? Do I only pay taxes based on the non-resident rate while not being seen as a tax-resident?
  • Are there other ways I can remain a tax resident while being away from Singapore?
Any help, either in the form of answers or directions to whom or which organisation to contact is deeply appreciated so thanks in advance!
IRAS and tax residence aside. If MOM starts checking your duration of stay with ICA, you may even have difficulties renewing your EP when it’s up.

My company is also going to offer this option and many are asking if they could work from their hometown/country. I hope MOM wake up their idea and start curtailing those EPs who want to have the best of both worlds.

But since your spouse is an SC you always the LTVP to fall back on. Good luck!

theboomboom
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Re: Tax residency and working remotely, away from Singapore

Post by theboomboom » Tue, 17 Nov 2020 9:08 am

Myasis would be the best guy for this. An important point though is not to accidentally end up being tax resident for TWO countries (for example Singapore and Australia) esp. if there is no dual tax treaty in place.
Unlikely that would happen. My idea is to spend a few months in my home country and Singapore to see friends and family and to go elsewhere for the rest of the year. But thanks for noting!
IRAS and tax residence aside. If MOM starts checking your duration of stay with ICA, you may even have difficulties renewing your EP when it’s up.

My company is also going to offer this option and many are asking if they could work from their hometown/country. I hope MOM wake up their idea and start curtailing those EPs who want to have the best of both worlds.

But since your spouse is an SC you always the LTVP to fall back on. Good luck!
Right, didn't consider that. Thanks for noting! My idea right now is to stay in Singapore for 183 days and spend the remaining part of the year elsewhere, but I am wondering what the consequences are if I spend less time here.

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malcontent
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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Tue, 17 Nov 2020 9:23 am

The IRAS website is pretty clear about the conditions under which they will treat you as a tax resident here. The same is almost certainly true for any other country.

Being tax resident in Singapore does not preclude simultaneous tax residency in another country (an extreme example, a U.S. person can never escape being considered a U.S. resident for tax purposes no matter where they live, or how long). In your case, you just need to look at both sets of tax residency regulations carefully and make sure you qualify for Singapore and don’t qualify for the other.

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Tue, 17 Nov 2020 10:12 am

Right Mal - for an Australian being back for 90 days or more for example becomes an issue (along with other residency tests) REGARDLESS of whether or not your tax resident in Singapore as well.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

theboomboom
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Re: Tax residency and working remotely, away from Singapore

Post by theboomboom » Tue, 17 Nov 2020 11:34 pm

In your case, you just need to look at both sets of tax residency regulations carefully and make sure you qualify for Singapore and don’t qualify for the other.
Right, that is what I thought. Thanks!

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Re: Tax residency and working remotely, away from Singapore

Post by Myasis Dragon » Thu, 19 Nov 2020 6:03 am

theboomboom wrote:
Mon, 16 Nov 2020 1:06 am
Sorry, if this question has been asked, but I searched for quite a bit and couldn't find anything relating to my question.

The pandemic has changed my company's view on having an office, and we have set-out to be a WFH/remote-work company. My company is supportive of anyone working from anywhere, so long it is in a legal way. Given this, I am exploring the idea of being (somewhat) nomadic and working from anywhere. But I am having a hard time fully painting the picture on how I would do that legally.

My situation is that I am on an EP and married to a SC. The company is based in Singapore. Now, to be clear on this, I don't want to avoid paying taxes. If anything, I want to remain a tax resident in Singapore, but be here for only a few months a year. From the IRAS website https://www.iras.gov.sg/irashome/Indivi ... o-Pay-Tax/ I understand that I will be seen as a tax resident if I am in Singapore for >183 days, and otherwise only taxed for any income I have earned in Singapore at a flat rate of 15%. Now,
  • What happens if I have an EP, but I am not in Singapore, at all. Am I still then a tax resident? If not, will I be a tax evader as I won't be a tax resident anywhere else?
  • Same question, but what if I am in Singapore for <183 days? Do I only pay taxes based on the non-resident rate while not being seen as a tax-resident?
  • Are there other ways I can remain a tax resident while being away from Singapore?
Any help, either in the form of answers or directions to whom or which organisation to contact is deeply appreciated so thanks in advance!
If you are not in Singapore at all, you cannot and will not have an EP. If you are living in a foreign country, then you will work for your company as a contractor. You will pay your taxes in your foreign country of residence. EP's are for non-Singaporean individuals living and working in Singapore. With no EP, you will not be tax resident.

About the only way you can retain an EP while not actually living in Singapore is to be employed by a Singapore company, retain a Singapore address, and be seconded by the company to another country to work.

But, your problem is that no other country wants you to be working in that country without legal authority to do so. So, let's say that you decide to move to Malaysia and work from there. You are now resident in Malaysia for tax purposes and you contract to your Singapore company. This means that you must do what is necessary to get work permits to live and work in Malaysia.

Now, you can get away with quite a lot of shenanigans with the Malaysians when it comes to working and living there without the proper passes. But, I'm not going to suggest that to you.

Presumably, as an expat, you have a home country that you can go to without worrying about residency permits. Your only question is: At what point do your become resident for the purposes of taxation.

Most countries have tax treaties to deal with these issues. Singapore and the USA do not, however. But in general, all countries in the world follow roughly the same set of rules.

Your personal income tax is paid in the country in which you work and reside. It doesn't matter if you are paid by a Singapore company... if you live in Brazil, you are taxed in Brazil.

Your taxation residence is determined by the location of your primary residence, and before you get into "yes, but, I have 2 places," tax treaties provide clear guidance on which residence is your primary residence for tax purposes.

Bottom line: If you're not living in Singapore, you don't pay Singapore taxes and you don't get an EP. This back and forth of less than 183 days or more than 183 days is mostly meaningless, because whichever country you are actually living in is going to want you to pay taxes.

In the case of the USA, you must demonstrate that you are living abroad for 330 days to be exempt from USA taxes.

You should specify what country you think you want to live in. That way, we can use applicable tax treaties to tell you what your tax status will be.

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Thu, 19 Nov 2020 6:39 am

MD my impression is that the OP wants to leave Singapore for periods of time to work away but doesn't intend to give up his residence or EP in Singapore. He can do this for periods of time for sure.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

theboomboom
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Re: Tax residency and working remotely, away from Singapore

Post by theboomboom » Thu, 19 Nov 2020 11:56 am

Bottom line: If you're not living in Singapore, you don't pay Singapore taxes and you don't get an EP. This back and forth of less than 183 days or more than 183 days is mostly meaningless, because whichever country you are actually living in is going to want you to pay taxes.

In the case of the USA, you must demonstrate that you are living abroad for 330 days to be exempt from USA taxes.

You should specify what country you think you want to live in. That way, we can use applicable tax treaties to tell you what your tax status will be.
MD my impression is that the OP wants to leave Singapore for periods of time to work away but doesn't intend to give up his residence or EP in Singapore. He can do this for periods of time for sure.
Thanks Myasis Dragon. PNGMK is correct, I don't intend to leave Singapore and settle down elsewhere while retaining tax residency here. I know that is not possible. Instead, given that I am permanently WFH, I want to spend some time in other countries on tourist visas. Say spend a month or two maybe in Malaysia, then three months in Singapore and then two months back in my home country in the Netherlands, you get the idea. Basically, be more nomadic with a base in Singapore.

If I do this, I'll likely forego my lease in Singapore and stay either in Serviced Apartments or with my in-laws when I am back. To help me, my company is willing to put in a letter for secondment, but I am not sure how that works and if there are ifs and buts attached to that. Right now I am under the impression that I can do this provided I am in Singapore for >183 days, but I don't know what will happen if I spend less time here and don't settle down anywhere else. This will put me in a legal tight spot as I won't be a tax resident in Singapore, nor elsewhere, and technically avoiding taxes. This will bring its own sets of problems and is something I am looking to avoid.

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Thu, 19 Nov 2020 2:25 pm

What would the secondment letter say? Personally (ignoring the travel issues - you really can't go to MY or anywhere else easily) I don't see an issue with this is you a travelling and retain some sort of residence (with your inlaws) in Singapore provided you're being paid out of a Singapore LE and have an EP. Plenty of people travel for most of the year while working for Singapore companies on EPs (or used to).
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Thu, 19 Nov 2020 7:58 pm

There are several global managers in my office who travel almost perpetually (pre-Covid anyway), they definitely are out of Singapore more than they are in. Some have their wife and kids living in the US, as they end up spending as much time in the US as they do in SG, but they still have an EP and company provided digs here.

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PNGMK
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Re: Tax residency and working remotely, away from Singapore

Post by PNGMK » Thu, 19 Nov 2020 8:28 pm

Yes one of my former managers was on a Singapore EP but based in KL. Explain that to me?
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

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Re: Tax residency and working remotely, away from Singapore

Post by BigginHill » Thu, 19 Nov 2020 11:21 pm

From a previous discussion on the forum, I actually believe an EP confers SG tax residency by definition (as far as SG is concerned), whether you're here or not. So that's different from being PR or SC. You do require an actual SG residence to retain an EP, of course.

If you're spending less than 183 days/yr in any other individual country, SG would remain your global tax residence. If spending more than 182 days/yr, that other country would become your legal tax residency. (as far as that country is concerned - you'd have to talk w/IRAS to determine your SG tax liability)

As such, why should MOM care whether you're physically here or not. EP holders don't derive any benefits or rights in SG. Like mal, I know plenty of EP holders who travel (or travelled) almost constantly for months at a time.

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Re: Tax residency and working remotely, away from Singapore

Post by malcontent » Fri, 20 Nov 2020 7:57 am

I think MOM and IRAS each have their own policies that get applied independently of one another. The global managers that I spoke of are not likely to see a great deal of difference, whether their income is taxed at the progressive 0-22% resident rates or the flat 15% non-resident rate in Singapore - in fact, the latter may even yield some tax savings.

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