Singapore Expats

TAX RELIEF

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ginge
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Posts: 11
Joined: Sun, 28 Aug 2005 7:49 pm
Location: UK

TAX RELIEF

Post by ginge » Thu, 10 Nov 2005 5:42 am

Hello. My wife, baby and I are due to arrive in Sinagpore Jan' 2006 for a 2 to 3 year stint. I was looking at the Singapore Tax Office website and noticed that I will be able to claim tax relief for my non-earning wife and child at $2,000 a piece. Can someone please explain how this works i.e. does this mean I pay $4,000 less in tax, or, that I am not taxed on an additional $4,000 of gross income. If it's the latter, then frankly i can't see why they would bother offering the relief as the tax rates are so low. Thanks.

Light
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Joined: Thu, 14 Apr 2005 11:38 am

Post by Light » Thu, 10 Nov 2005 8:21 am

Tax Reliefs are given as deductions against the individual's assessable (taxable) income and are available only to individuals who are tax residents in Singapore. Since you will likely to be in Singapore for more than 183 days within next calendar year (assuming you are not traveling more than six months out the of year), you will qualify for these reliefs as residents. If you travel outside Singapore for more than six months, resulting in the total number of days in Sinagpore to be less than 183 days, you will be considered either "non-resident" or "NOR" (Not Ordinarily Resident). Non-residents and NORs do not get any tax reliefs but get taxed on a lower tax rate. Non-residents are generally taxed at 15% flat tax rate and NORs have the option of prorated tax rate based on the number of days worked in or outside Singapore. If you want a comprehensive tax guide, let me know your email address and I will forward you a tax guide that shows much more than what IRAS site shows. Cheers!

yoongf
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Joined: Tue, 20 Jul 2004 4:29 pm
Location: Dunearn/Chancery

Re: TAX RELIEF

Post by yoongf » Thu, 10 Nov 2005 9:27 am

ginge wrote:Hello. My wife, baby and I are due to arrive in Sinagpore Jan' 2006 for a 2 to 3 year stint. I was looking at the Singapore Tax Office website and noticed that I will be able to claim tax relief for my non-earning wife and child at $2,000 a piece. Can someone please explain how this works i.e. does this mean I pay $4,000 less in tax, or, that I am not taxed on an additional $4,000 of gross income. If it's the latter, then frankly i can't see why they would bother offering the relief as the tax rates are so low. Thanks.
It's the latter. Every cent counts. Also, the govt has certain social objectives to encourage/discourage, and it's done through the tax relief system.

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