tiktok wrote: ↑
Mon, 11 Oct 2021 9:03 am
The relevant part the the Singapore Income Tax act seems to be:
Employment exercised in Singapore
(4) The gains or profits from any employment exercised in Singapore shall be deemed to be derived from Singapore whether the gains or profits from such employment are received in Singapore or not.
This reads like it was written before the internet age. There might be a legal argument to be made about "exercising employment" as it relates to piece work done for a foreign entity, under an offshore contract, on offshore servers, with income received offshore. But I'm not a lawyer.
It is completely relevant to the internet age, although it was written prior to the internet. But the terms are clear and applicable to the internet as well.
a) "employment exercised in Singapore" - There is no "legal argument to be made" about piece work for a foreign entity. The law is clear. As I've previously noted and documented via IRAS links, if you live and/or work in Singapore, you are tax resident in Singapore. Period. End. Therefore, if you are performing work while living in Singapore it is "employment exercised in Singapore". Period. End.
Therefore, if you are an eBay trader, buying crap in China, forwarding it to a fulfillment center in India, selling it on an eBay website in the USA, and depositing your funds into a Hong Kong bank, if you are doing all of this while sitting in your HDB flat in Singapore, this is "employment exercised in Singapore". Period. End.
Therefore, if you are a lawyer, processing contract claims for a company in Thailand, from the comfort of your Marina Bay high rise, and paid into your Malaysian bank account, this is "employment exercised in Singapore". Period. End.
Therefore, if you are a bag lady, living under the Newton flyover, making sandals out of old tires, and exporting them to a Myanmar company who resells them in Rangoon, this is "employment exercised in Singapore".
For emphasis: If you live in Singapore and you receive income for doing work for someone else (foreign or domestic) that income is taxable in Singapore. Period. End.
b) "whether the gains or profits from such employment are received in Singapore or not" - This phrase exists precisely for clarity. Some folks try to claim that they didn't exercise employment in Singapore because they didn't get paid in Singapore. This phrase says it doesn't matter where you decide to get paid. Think about it. You get paid into a Hong Kong bank account, then later transfer your funds into your Singapore bank account. There is no difference between that and getting paid directly into your Singapore bank account.
Read PNKMK's excellent post. It supports everything that SMS and I have said regarding tax residency. It also shows you that unless you have a bog standard situation, you need to contact a CPA for any unusual circumstances that may be affected by tax rulings and tax treaties.
It really is simple. If you work here, you pay here. If you work there, you pay there. "Here" and "There" is where you live and work.