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Tax resident and double tax for working remotely in Singapore

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Yuk
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Tax resident and double tax for working remotely in Singapore

Post by Yuk » Tue, 26 Oct 2021 8:51 am

Hi my friend is currently on Dependant Pass, works remotely for a HK company, get paid in HKD to his bank account in Hong Kong. We would like to clarify a few questions below:
1. He is liable to Singapore income tax if staying in over 60 days; if over 183 days, he is considered as tax resident. Does the 183 days rule still apply if he is a company director for the Hong Kong company? He is also a director for a Singapore company which is not operating.
2. If he is paying Singapore income tax, how would he get tax relief from Hong Kong to avoid double tax?
Thank you very much SE and everyone for your help in advance!
by Myasis Dragon » Sat, 30 Oct 2021 4:07 am
I assume that the HK company your friend works for remotely has no legal presence in Singapore and does not service customers in Singapore, otherwise, your friend would require a work permit to work for the company.

Your friend's residency status is based solely upon where he lives and works. If he works in Singapore, he is Singapore tax resident. It does not matter if he is a director of a Hong Kong company; he works in Singapore and therefore pays tax in Singapore.

I don't know if your friend is a Hong Kong citizen or PR or not. Hong Kong's taxing regimen is somewhat more complicated than Singapore's, and it may be possible that tax is due in two places, depending upon both his citizenship status and work location. Singapore and Hong Kong have a double taxation treaty which generally means that one country gives you tax credits for taxes paid in another country.

How can your friend be a director of a Singapore company? ICA and MOM have made it pretty clear that if you are a director for a company, you must have a work pass. If you are an independent director sitting on the board of a company, you must have an employment pass from another company. Only if the company is registered as dormant might this not be the case.

Bottom line: You will pay taxes in Singapore. You need a CPA to determine if, for your situation, you would claim tax credits in Singapore for taxes paid in Hong Kong, or the other way around.
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Myasis Dragon
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Re: Tax resident and double tax for working remotely in Singapore

Post by Myasis Dragon » Sat, 30 Oct 2021 4:07 am

I assume that the HK company your friend works for remotely has no legal presence in Singapore and does not service customers in Singapore, otherwise, your friend would require a work permit to work for the company.

Your friend's residency status is based solely upon where he lives and works. If he works in Singapore, he is Singapore tax resident. It does not matter if he is a director of a Hong Kong company; he works in Singapore and therefore pays tax in Singapore.

I don't know if your friend is a Hong Kong citizen or PR or not. Hong Kong's taxing regimen is somewhat more complicated than Singapore's, and it may be possible that tax is due in two places, depending upon both his citizenship status and work location. Singapore and Hong Kong have a double taxation treaty which generally means that one country gives you tax credits for taxes paid in another country.

How can your friend be a director of a Singapore company? ICA and MOM have made it pretty clear that if you are a director for a company, you must have a work pass. If you are an independent director sitting on the board of a company, you must have an employment pass from another company. Only if the company is registered as dormant might this not be the case.

Bottom line: You will pay taxes in Singapore. You need a CPA to determine if, for your situation, you would claim tax credits in Singapore for taxes paid in Hong Kong, or the other way around.

PrinceHeldun
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Re: Tax resident and double tax for working remotely in Singapore

Post by PrinceHeldun » Sun, 13 Feb 2022 8:29 am

Here's what I found. Only residents can benefit from double taxation treaties. Section 2 of the Singapore Income Tax Act defines a resident as: An individual: A person who, during the year preceding the reporting year, resided continuously in Singapore, except for reasonably necessary short periods of absence not inconsistent with Singapore resident status, including a person who is physically present or engaged in employment (but not as a company director) in Singapore for 183 days or more in the year preceding the reporting year. Who among you knows how to incorporate a company in Singapore? I've searched but haven't found anything.
Last edited by PrinceHeldun on Fri, 18 Feb 2022 8:36 pm, edited 1 time in total.

Myasis Dragon
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Re: Tax resident and double tax for working remotely in Singapore

Post by Myasis Dragon » Sun, 13 Feb 2022 1:02 pm

PrinceHeldun wrote:
Sun, 13 Feb 2022 8:29 am
Double taxation can be avoided when foreign income is exempt from local taxes. The exemption can be given either on all foreign income or on its part.
It would help a lot if you knew what you are talking about.

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malcontent
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Re: Tax resident and double tax for working remotely in Singapore

Post by malcontent » Sun, 13 Feb 2022 1:23 pm

Myasis Dragon wrote:
Sun, 13 Feb 2022 1:02 pm
PrinceHeldun wrote:
Sun, 13 Feb 2022 8:29 am
Double taxation can be avoided when foreign income is exempt from local taxes. The exemption can be given either on all foreign income or on its part.
It would help a lot if you knew what you are talking about.
SMS already called out this prince as an unkissable frog from Eindhoven, NL in this thread.

viewtopic.php?f=76&t=145504&p=859869#p859869
It is impossible for a man to learn what he thinks he already knows - Epictetus

Myasis Dragon
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Re: Tax resident and double tax for working remotely in Singapore

Post by Myasis Dragon » Mon, 14 Feb 2022 3:05 am

malcontent wrote:
Sun, 13 Feb 2022 1:23 pm
Myasis Dragon wrote:
Sun, 13 Feb 2022 1:02 pm
PrinceHeldun wrote:
Sun, 13 Feb 2022 8:29 am
Double taxation can be avoided when foreign income is exempt from local taxes. The exemption can be given either on all foreign income or on its part.
It would help a lot if you knew what you are talking about.
SMS already called out this prince as an unkissable frog from Eindhoven, NL in this thread.

viewtopic.php?f=76&t=145504&p=859869#p859869
Seems like he's one more person that read the "foreign income" sentence on the IRAS website and misinterpreted it.

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malcontent
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Re: Tax resident and double tax for working remotely in Singapore

Post by malcontent » Mon, 14 Feb 2022 9:15 pm

Myasis Dragon wrote:
Mon, 14 Feb 2022 3:05 am
Seems like he's one more person that read the "foreign income" sentence on the IRAS website and misinterpreted it.
It’s actually worse than that. If you copy the post and google it, you’ll find the entire block of text was copied wholesale from this website —

https://www.guidemesingapore.com/busine ... x-treaties

Not the first time I’ve come across these types of nonsensical plagiaristic posts. I have to believe it is some kind of bot that is trying to match relevant pieces of content from the web with subjects being discussed on the board.
It is impossible for a man to learn what he thinks he already knows - Epictetus

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Re: Tax resident and double tax for working remotely in Singapore

Post by Myasis Dragon » Mon, 14 Feb 2022 11:19 pm

malcontent wrote:
Mon, 14 Feb 2022 9:15 pm
Not the first time I’ve come across these types of nonsensical plagiaristic posts. I have to believe it is some kind of bot that is trying to match relevant pieces of content from the web with subjects being discussed on the board.
Or... the poster puts up some innocuous stuff that passes the spam test, then comes back a few weeks later to modify the post with a spam posting.

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malcontent
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Re: Tax resident and double tax for working remotely in Singapore

Post by malcontent » Tue, 15 Feb 2022 12:28 pm

So do these guys get flagged as suspicious and future activity is monitored?

There ought to be a way to restrict the ability for those under suspicion to go back and do edits.
It is impossible for a man to learn what he thinks he already knows - Epictetus

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sundaymorningstaple
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Re: Tax resident and double tax for working remotely in Singapore

Post by sundaymorningstaple » Tue, 15 Feb 2022 6:39 pm

Mal, that's basically exactly what we do, in addition to sweeping out the obvious trash. We also do some sleuthing when we have time. Often times by SE and I will post my "tic...toc.." which is a reference to being monitored. We also can/do go in a restrict the ability of the original poster to edit their posts. While we normally don't do that because it ticks off real posters when they make honest mistakes and that how we often end up with duplicate posts. We are always walking the fence as it were.
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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