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Singapore Taxes

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AntonPara
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Singapore Taxes

Postby AntonPara » Mon, 22 Aug 2005 10:05 pm

Hi all,

i am being relocated to Singapore by my company i work for in the U.K. they are offering me a "car allowance" of SGD2000 per month on top of my salary and other benefits... etc... it is worth bearing in mind that i am being employed as a "LOCAL"! and NOT EXPAT!. which i prefer due to the tax benefit of not being paid in GB£s.....

is any of you out there can tell me whether:

1. SGD2000 is enough to run a decent car in Singapore?
2. how is this taxed?... e.g. would i be better off to include this in my monthy pay rather that declare it a perk?....

please reply as i am really pushed for time to agree on a package :roll: !.... thanks

Antonpara

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Carpe Diem
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Postby Carpe Diem » Mon, 22 Aug 2005 10:49 pm

AntonPara wrote:1. SGD2000 is enough to run a decent car in Singapore?


That sounds quite good already, unless you want a specific model of sports car...

AntonPara wrote:2. how is this taxed?... e.g. would i be better off to include this in my monthy pay rather that declare it a perk?....


Benefits in kind such as car are less taxed than if included in the salary.

The exact calculation is (as mentioned on IRAS website)

For car provided by the employer, the taxable benefits are calculated as follows:

If the cost of petrol is borne by the employer:
3/7 x (car cost - residual value) / 10 + ($0.55/km x private mileage) or (3/7 x rental cost incurred by the employer) + ($0.10 per km x private mileage)
If the cost of petrol is borne by the employee:
3/7 x (car cost - residual value) / 10 + ($0.45/km x private mileage) or (3/7 x rental cost incurred by the employer)


where:

• 3/7 refers to the use of the car outside office hours for private matters which is estimated at 3 out of 7 days in a week.

• "Car cost" refers to the acquisition cost of a car (inclusive of COE) paid or payable at the date of purchase. If the car was "company-registered" (i.e. Q-plate) before 1 Apr 1998, the cost of the car should be pegged to that of an identical private car.

• "Residual Value" is equal to 80% of the Open-Market Value (OMV) of the car if the car was registered on or after 1 Nov 1990. The OMV of the car at the time of purchase can be obtained from the owner’s logbook/log card or car dealer.

Notes:
i) If your employee did not use the car for the full year, the cost of the car can be apportioned.

ii) If you rented a car for your employee's use, the rental cost of the car should be used instead of the car cost.

You may visit http://www.iras.gov.sg for more information.

Hope this helps!
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AntonPara
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Owning a car and allowances...

Postby AntonPara » Tue, 23 Aug 2005 9:10 am

Hey thanks for that Info Carpe diem!....

my God!, didn't realise there was all sorts of complicated formulas to owning a car in Singapore!....

i dont yet know what sort of car i am going for, but do you think I could afford to go for something that costs approx SDG100,000??.... like the Toyota fortuna quite a bit!... its about a 100K!!! :P

thanks

Antonpara

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Postby Carpe Diem » Tue, 23 Aug 2005 9:22 am

You're most welcome.

As for the model you'd like to have, I have no idea. I am a bit confused here. Do you plan to buy a car? Why don't you rent it? I know many people who do that and, on average, I would say their budget is in the range of 1,500 per month.

And if you buy it - and obviously are the owner - your monthly 2,000 will be considered as salary I guess.

May be other people will be able to answer with more details.

Anyway, you don't really need a car here, public transportation is very good. We do everything by taxi or buses, quite cheap.
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cyber_m0nkey
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Postby cyber_m0nkey » Wed, 24 Aug 2005 11:20 am

I just leased a car that would cost about $155k to buy at $3250 /mth so for $2k you should be able to get a car that would otherwise cost around $100k.

If you receive the cash and then pay the lease yourself, then the full amount is taxable as income. If however it is a benefit in kind, i.e. the lease is in the company name and they pay directly then apply the formula from carpe diem.

Just make sure that the insurance on the car is full comprehensive - I almost got caught on this one.

mAnInBlAcK
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Postby mAnInBlAcK » Wed, 24 Aug 2005 3:21 pm

anyone has any tips or advice how to do good tax planning for those wanting to do own business?


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