Tax residency and working remotely, away from Singapore

[PNGMK]

I'm also interested in this topic and have one extra question.

Can this way of life (3 months/year in SG, rest of the year in many different countries) be a cause of not getting EP renewed (assuming the company is ok with it)?

The EP will be renewed baring any other factors.

[malcontent]

I would doubt that time in country is even one of the criteria they consider for an EP, unless they suspect something shady.

[whitesneakers]

Hi, what about if it’s the opposite? If you’re in DP and accepting a work overseas which doesn’t have a presence in sg? How does the tax would work?

[PNGMK]

Hi, what about if it’s the opposite? If you’re in DP and accepting a work overseas which doesn’t have a presence in sg? How does the tax would work?

"Generally, overseas income received in Singapore by you is not taxable and need not be declared in your Income Tax Return. This includes overseas income paid into a Singapore bank account."

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

[sundaymorningstaple]

Hi, what about if it’s the opposite? If you’re in DP and accepting a work overseas which doesn’t have a presence in sg? How does the tax would work?

"Generally, overseas income received in Singapore by you is not taxable and need not be declared in your Income Tax Return. This includes overseas income paid into a Singapore bank account."

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

Almost but not quite. I fear whitesneakers will misread that without further explanation as there is more detail elsewhere on IRAS's with regard to this.

What is Taxable and What is Not
Besides salaries and bonuses, employment benefits such as housing and stock options will also form part of your taxable employment income .

Overseas income derived outside Singapore, Singapore dividends and bank interest are tax exempt in Singapore.

This means exactly what it says, derived OUTSIDE Singapore is not reportable/taxable. IF she is working remotely from within Singapore then her income is technically being derived from within Singapore (this is exactly what SE, MD & I are always on about. She doesn't need a working pass to work for an offshore company while here as long as there isn't a presence, etc, etc. but salaries from working remotely are taxable as the work is being preformed here in SG.

[PNGMK]

True true. I always forget that becoming resident (which a DP does) makes your liable for income tax in this case, even though her company is not here.

[whitesneakers]

Thank you so much PGMK and @sundaymorningstaple. Appreciate the responses

[PNGMK]

Thank you so much PGMK and @sundaymorningstaple. Appreciate the responses

FYI to record the income you file on iras.gov.sg and record it as "other" income when filing. Also note that if you are not present in Singapore for part of the year you can claim a rebate on income tax in some cases where your employer is not based here in Singapore.

[alphahuskie]

Would anyone know in the scenario of you being a SPR, but due to circumstances now plan to remotely for bulk of the year e.g. 11 months out of a year, for a Singapore-based company. So essentially the work is still incidental to Singapore but most of the time spent outside - would one still be considered a tax resident?

[PNGMK]

Would anyone know in the scenario of you being a SPR, but due to circumstances now plan to remotely for bulk of the year e.g. 11 months out of a year, for a Singapore-based company. So essentially the work is still incidental to Singapore but most of the time spent outside - would one still be considered a tax resident?

You need to pay tax ("All individuals earning, deriving or receiving income in Singapore need to pay income tax every year, unless specifically exempted under the Income Tax Act or by an Administrative Concession.) ".

Furthermore - "If you are issued with a work pass that is valid for at least one year, you will also be treated as a tax resident upfront." but as a SPR I would say "You will be regarded as a tax resident if you stay or work in Singapore for at least 183 days in a calendar year; or continuously for three consecutive years; or work in Singapore for a period straddling two calendar years and your total period of stay* is at least 183 days."

You may not be a tax resident and therefore subject to the flat 15% rule - this may be disadvantageous to you because as a non-resident:
You will only be taxed on all income earned in Singapore.
You will not be entitled to tax reliefs.
Your employment income will be taxed at a flat rate of 15% or the progressive resident rates, whichever results in a higher tax amount.

Personally I would "assume" you are tax residency and not complete form M. If challenged on this point out that you maintain a home, bank accounts etc and consider Singapore your residence. Also I suspect you meet the 3 year rule at present.

Don't forget double taxation, you may be liable for income tax where you are staying for the 11 months. If that is the case I would move to have the Singapore company contract you via a local payroll company so as to eliminate your Singapore tax liability completely (as the income is now derived locally).

[Lim_Jeremy]

1. You will not be a tax resident in Singapore. You will have to declare your income to all relevant authorities and as long as you do, you are not committing tax fraud.

However, do note that most likely, IRAS will send you an assessment with tax liability and you will have to appeal that you are not residing in Singapore, and therefore exempted from tax. This is usually the case because ultimately, your income is derived from a Singapore company.

Also note that if you are not paying taxes in Singapore, it may affect your EP renewal success rate.

[Lim_Jeremy]

2. If you are in Singapore between 61 to 182 days, you will be taxed as a non-tax resident. This will be a flat rate of 15% or progressive resident rates, whichever gives rise to a higher tax amount.

3. Your tax residency status is calculated by number of days you are in Singapore. The 3 main ways are:

- stay/work in Singapore 183 days or more
- work in Singapore for a period straddling two calendar years and your total period of stay is at least 183 days.
- stay/work in Singapore 3 consecutive years even if first or third year is less than 183 days

[alphahuskie]

Would anyone know in the scenario of you being a SPR, but due to circumstances now plan to remotely for bulk of the year e.g. 11 months out of a year, for a Singapore-based company. So essentially the work is still incidental to Singapore but most of the time spent outside - would one still be considered a tax resident?

You need to pay tax ("All individuals earning, deriving or receiving income in Singapore need to pay income tax every year, unless specifically exempted under the Income Tax Act or by an Administrative Concession.) ".

Furthermore - "If you are issued with a work pass that is valid for at least one year, you will also be treated as a tax resident upfront." but as a SPR I would say "You will be regarded as a tax resident if you stay or work in Singapore for at least 183 days in a calendar year; or continuously for three consecutive years; or work in Singapore for a period straddling two calendar years and your total period of stay* is at least 183 days."

You may not be a tax resident and therefore subject to the flat 15% rule - this may be disadvantageous to you because as a non-resident:
You will only be taxed on all income earned in Singapore.
You will not be entitled to tax reliefs.
Your employment income will be taxed at a flat rate of 15% or the progressive resident rates, whichever results in a higher tax amount.

Personally I would "assume" you are tax residency and not complete form M. If challenged on this point out that you maintain a home, bank accounts etc and consider Singapore your residence. Also I suspect you meet the 3 year rule at present.

Don't forget double taxation, you may be liable for income tax where you are staying for the 11 months. If that is the case I would move to have the Singapore company contract you via a local payroll company so as to eliminate your Singapore tax liability completely (as the income is now derived locally).

Thank you Masa.

[PNGMK]

I think you're wrong Jeremy. OP will be tax liable to IRAS; either at 15% non resident rates or the progressive rates.

[Myasis Dragon]

I think you're wrong Jeremy. OP will be tax liable to IRAS; either at 15% non resident rates or the progressive rates.

This is when the section:

Overseas income derived outside Singapore, Singapore dividends and bank interest are tax exempt in Singapore.

becomes applicable.

If you are working overseas long enough to attract tax responsibilities in that country, then Singapore won't tax you. The assumption, of course, is that you are paying tax in the other country and Singapore will not double tax you.

Example: I am SPR, working for Singapore company, Acme Pte Ltd. Acme sends me to Kuala Lumpur to work for a year. Under Malaysian tax law, I must pay Malaysian income tax; further, Acme needs to have a legal presence in Malaysia, Acme Sdn Bhd.

Even if I am still paid by Acme Singapore, into my Singapore bank account, my tax responsibilities are with Malaysia, and I will not pay Singapore income tax while I am resident and working in KL.