Working freelance in Singapore

[geraldinecorbett]

Hi

We may be relocating to Singapore in the new year. My husband would be working with a telco company. I run my own UK business and work as a digital marketing consultant. It's just me, I have no employees. Would I be able to continue working if we were to move? I am happy to keep it as a UK company and currently draw a salary and dividends.

Any advice would be greatly appreciated.
Thank you.

[tiktok]

AFAIK you don't need to set up any company or sole proprietorship, you don't need to file tax returns or pay tax, and you don't even need to tell the government. See https://anza.org.sg/2018/04/26/the-set-up/

[Sunjackal]

The rules as I know it are that you’re fine - as long as you aren’t doing business in Singapore.

[sundaymorningstaple]

AFAIK you don't need to set up any company or sole proprietorship, you don't need to file tax returns or pay tax, and you don't even need to tell the government. See https://anza.org.sg/2018/04/26/the-set-up/

.gov.sg link?

[Myasis Dragon]

AFAIK you don't need to set up any company or sole proprietorship, you don't need to file tax returns or pay tax, and you don't even need to tell the government. See https://anza.org.sg/2018/04/26/the-set-up/

You really shouldn't be spreading misinformation like this. It's simply false.

It is true that you can work for an overseas company that has no physical presence in Singapore and provides no goods or services in Singapore, without needing to have a Singapore work permit. Rationale: You are not taking jobs from a local, therefore, no permit required.

It is not true that you pay no tax. In general, and globally (with the USA being a notable exception), you pay taxes in the country in which you work and reside. Therefore, this spouse will pay tax in Singapore as a self employed person.

No registration of a business name is required so long as all business is carried on in the exact name as shown on the FIN card. For example, if Smith Mary is on the FIN card and bank account, you are good to go. If the name is Mary Smith Consulting, then you will need to file for a registered business name with the ACRA

Additionally, anyone contemplating such a move would be wise to check the tax treaties between two countries for any additional dependencies. One thing is for sure... every country wants you to pay income tax somewhere.

Now, I will say that you could probably not report any income, since it would be very hard to trace, and thereby avoid tax, but that's not legal.

[tiktok]

I certainly don't want to spread misinformation, but I have heard the opposite from several trustworthy real life people with regards to taxes. This includes a lawyer, and someone who was told this in a phone call with IRAS and recorded the conversation. I would love to find a definitive answer on a government website, but have been unable to.

One thing is for sure... every country wants you to pay income tax somewhere.

As I mentioned before on this site, this is not the case in Hong Kong. Residents who derive income from overseas are explicitly exempt from HK income tax. So it is not a hard and fast rule that you must always pay income tax.

[Myasis Dragon]

I certainly don't want to spread misinformation, but I have heard the opposite from several trustworthy real life people with regards to taxes. This includes a lawyer, and someone who was told this in a phone call with IRAS and recorded the conversation. I would love to find a definitive answer on a government website, but have been unable to.

One thing is for sure... every country wants you to pay income tax somewhere.

As I mentioned before on this site, this is not the case in Hong Kong. Residents who derive income from overseas are explicitly exempt from HK income tax. So it is not a hard and fast rule that you must always pay income tax.

Like many others on this board, you clearly don't understand what "overseas income" means. You should ask one of your lawyer friends... because... if you are earning a living while resident in Singapore, that's not overseas income, that's locally earned income, and simply because you are paid from a foreign source doesn't make it overseas income.

Fact is, if you are resident in Singapore on an EP, LTVP, DP, then you are tax resident. It doesn't matter if you're paid from a company in Italy, into a Brazilian bank account, in Zimbabwe dollars... your income is taxable in Singapore.

Most countries in the world, with the notable exceptions of the USA and Eritrea, follow this rule... Hong Kong does as well. So, whomever told you that Hong Kong is different from the rest of the world is misinformed.

PS: I call bullshit on the "someone" who was told this by IRAS, because... it simply aint so.

PPS: It's easy to find the relevant information on the IRAS website:

Tax residency (note that all you have to do is "stay" in Singapore to be tax resident: https://www.iras.gov.sg/irashome/Indivi ... o-Pay-Tax/

Overseas income - it means the income you earned while resident in another country, even though Singapore is still your home: https://www.iras.gov.sg/irashome/Indivi ... Singapore/

Living and working remotely from Singapore means that you are tax resident and earn locally in Singapore.

[tiktok]

Sorry but I'm still not convinced. From the first link:

Your foreign-sourced income (with the exception of those received through partnerships in Singapore) brought into Singapore on or after 1 Jan 2004 is tax exempt.

From the second link:

Overseas income is taxable in Singapore if:

a) It is received through partnerships in Singapore; or

b) Your overseas employment is incidental to your Singapore employment (i.e. as part of your job requirements, you are required to travel overseas).

c) You are employed Overseas on Behalf of the Singapore Government

d) You have a trade/business in Singapore and you are carrying on a trade/business overseas which is incidental to your trade carried out in Singapore.

Should your gains from your overseas employment be taxed in the foreign country/region, you may apply for double taxation relief, to avoid being taxed twice on the same income.

None of the above 4 points apply to the OP's situation as far as I can see.

As for Hong Kong, I lived there for several years, tried my best to pay taxes on my overseas-sourced freelance income, but the government would not accept a cent. They are very clear about it, e.g. https://www.gov.hk/en/residents/taxes/s ... ployee.htm

[sundaymorningstaple]

MD, Just let him froth at the mouth as he is want to do. It is plainly spelled out as you have linked and as IRAS has confirmed with us in the past.

As long as you have put it in plain view all here will know who has the straight poo and who is just farting out his arse. Remember, he's just a resident troll who admin allowed us to keep, or not. The difference between Overseas Income (working while overseas) and Resident earned income (regardless of the source of the payment or employer) is easy enough for anybody to understand unless they are just being obtuse. He cannot (or refuses to) understand that there are two different sets of rules between MOM and IRAS.

[tiktok]

Hi SMS, ignoring your customary personal attacks, you would be doing us all a great favour by explaining which of the points a-d from the IRAS site quoted above apply to a freelancer such as the OP outlines. I fully expect a flippant non answer from you, but the IRAS rules are simply ambiguous at best, and whatever you might think of me I know for a fact many other people who have interpreted then to mean "I don't need to pay tax as a freelancer in Singapore working for a foreign entity." If you want to say they are all wrong, kindly support with strong facts - i.e.links to gov.sg websites as you say.

Please remember that the OP and other readers are potentially making life changing decisions for their families based on the discussion in this thread.

Some people are obviously very unhappy that others can get away tax free. But that doesn't mean it's illegal.

[sundaymorningstaple]

MD gave you the links. It's a shame you don't understand the written word. and the difference between Overseas income and Resident earned income from a foreign source. If there wasn't a difference they would have used two different terms to describe the differences. Try going back and reading the links for what is written. You have already been given the information by MD. I fully expect your friends probably do it differently. After all birds of a feather....

What people do and what is the legality of it is often two different things. But minor things like that don't bother your types.

Points a~d pertain to Overseas Earned Income. And yes, I agree that the money you earn while you are not in Singapore but earning it while in another country besides Singapore (which is what that is talking about) is not taxable to Singapore as stated. But Overseas Income is not what we are discussing. This is where YOU have a problem. We are talking about people who are resident not necessarily on work passes but ANY type of residency (anything other than a SVP) and are WFH (Working From Home-in case you aren't' familiar with that) but are working from(in) Singapore for a Foreign Company with no local presence nor clients in Singapore. They can be paid anywhere, Singapore, or any other country, that is immaterial. The issue is Work in Singapore. IRAS position is if you perform work physically IN Singapore is it taxable to Singapore just like if you are working outside of Singapore but have residency in Singapore, that income is NOT taxable UNLESS if falls under items a~d.

However, as MD already mentioned, whether those people working from home actually report the income is another story. If they don't they are breaking IRAS laws. Will they get caught? Doubtful. But the law is the law and it is what it is. Gamble and get caught, your sponsor loses their work pass and the whole family get sent packing (after the DP holder pays the taxes and/or get out of prison for tax evasion).

[sundaymorningstaple]

Oh, and seeing your confusion between the two terms, you can call IRAS as ask your question but phrase it wrongly and you will probably get two different answers especially if you don't realize there are two different terms in play.

[Myasis Dragon]

Maybe you're "I not troll/wacko/spammer" (although your posts suggest that is exactly what you are) but you are for sure a fool.

Worse, instead of simply admitting that you have misinformation, you continue to insist that your position is correct. You continue to mislead people.

I ran a company in Singapore for eight years. I had employees that worked for varying lengths of time in Malaysia, Korea, Australia, Thailand, and the Philippines. I had a Hong Kong lawyer prepare all of my contracts. My Singapore CPA, and my Thai CPA advised me on all employment transactions. I trust them a lot more than any specious "information" you think you are providing here.

In summary:

a) I don't give a shit if you're "convinced" or not about the veracity of my links. There is nothing "ambiguous" about Singapore tax law, only your understanding of same.

b) You obviously don't understand your own HK link.

In order to avoid HK income tax:

• The contract of employment was negotiated and entered into, and is enforceable outside Hong Kong SAR.
• The employer is a resident outside Hong Kong SAR.
• The employee’s remuneration is paid outside Hong Kong SAR.

If all three of the above conditions were met you would not pay HK income tax. Did you meet all three of those conditions?

BUT, this is NOT Singapore law at all. The rules are completely different. If you live in Singapore, you are tax resident and pay Singapore income tax.

So, please... tamp down that enormously fragile ego of yours and reexamine your need to be right when are you so pitifully wrong.

[Myasis Dragon]

One more thing, and in a separate post to avoid confusing the foreign income thread, income tax evasion is not limited to Singapore expats... DP, EP, LTVP, PR... it's also something that Singapore citizens do.

Every self employed person in Singapore has the potential to be a tax evader. Keep foreign bank accounts. Transact your business remotely. Don't leave any local trails. Hide the source of funds that do end up in your local account. The trash collectors, the karung guni, operate almost exclusively on a cash basis. You really think that they are reporting every penny they collect?

Same for any cash business. Those state supported hawker centers, nominally in existence to provide cheap rents, also provide a means for the Singapore gahmen to keep tabs on all those mom and pop businesses who operate out of a cigar box.

The onerous reporting regulations that the USA has forced upon American expats are precisely an attempt to control tax avoidance. Singapore would love to do the same thing... except, as the "Switzerland of Asia", Singapore also wants to protect its banking secrecy laws to avoid running off all the corrupt cash that keeps Singapore banks flush. So, as an expat, if you want to cheat, it's pretty easy.

But, do not tell people here that tax avoidance through remote work is legal. It's not. There is no country in which income tax evasion is legal, and many countries have reciprocal tax agreements precisely to capture tax cheats. Lots of expats have made a career of avoiding taxes... working offshore with no known jurisdiction, moving around from country to country, cash jobs... but even these folks are finding it harder and harder to avoid taxation and government systems become more integrated.

Anyone who "interpreted then (sic) (IRAS laws) to mean 'I don't need to pay tax as a freelancer in Singapore working for a foreign entity,'" is in violation of the law.

[x9200]

Sorry but I'm still not convinced. From the first link:

Your foreign-sourced income (with the exception of those received through partnerships in Singapore) brought into Singapore on or after 1 Jan 2004 is tax exempt.

From the second link:

Overseas income is taxable in Singapore if:

a) It is received through partnerships in Singapore; or

b) Your overseas employment is incidental to your Singapore employment (i.e. as part of your job requirements, you are required to travel overseas).

c) You are employed Overseas on Behalf of the Singapore Government

d) You have a trade/business in Singapore and you are carrying on a trade/business overseas which is incidental to your trade carried out in Singapore.

Should your gains from your overseas employment be taxed in the foreign country/region, you may apply for double taxation relief, to avoid being taxed twice on the same income.

None of the above 4 points apply to the OP's situation as far as I can see.

As for Hong Kong, I lived there for several years, tried my best to pay taxes on my overseas-sourced freelance income, but the government would not accept a cent. They are very clear about it, e.g. https://www.gov.hk/en/residents/taxes/s ... ployee.htm

If you look at the common denominator of all the above points (except "c") you may notice that they de facto concern situations where one lives and earns in Singapore. And this is even the case when one is formally employed abroad. The income tax is a maintenance tax for local infrastructure and services so if one lives locally and uses these services and infrastructure to obtain her/his income it seems only logical the taxes should be paid. Of course a government could be very generous, but with rather significant and growing fraction of the income derived from online services this would be somehow strange and opening potentially rather huge loophole in the system.