stormie wrote:Appreciate your comments. Can you point me to a webpage with information on computing the CPF and this circular method of computation? What do you think abt me declaring myself self-employed and contributing my own CPF and I would declare the income remitted by my employer as foreign income. I might be able to avoid paying taxes in both countries because Singapore does have a double-taxation avoidance agreement with the country in mention.
I'm just looking at what options are available. In fact I'm flying there to discuss the terms of my employment so am gathering as much info as I can. Again thanks for your advice/help.
Stormie,
Following are a number of links to the IRAS website (different articles, circulars and pages) the last one gives an indication of what I meant about circular methods (See example two) This is based on a flat 15% and not the same things but the principle is the same. They call it regrossing of your income to taken into consideration the taxes paid on taxes.
The question & Answer is from the CPF website.
Circular regarding Overseas income received in Singapore
Taxation of Income from Overseas Employment
Individuals Employed by Non-Resident Employers (NRE)
Computation of Withholding Tax Where Tax Is Borne By Local Sponsor/Agent (Example 2)
This taken from the CPF Website:
Q: Are there any exceptions to the payment of CPF contributions for employees?
A:
Yes, please refer to the list of exceptions below:
a) Foreigners on Employment Pass, Professional Visit Pass or Work Permit
CPF contributions are not allowed for foreigners. Both the employer’s and employee’s contributions for foreign employees on Employment Pass, Professional Visit Pass or Work Permit will be rejected.
b) Partners, sole proprietors or self-employed
All Singapore citizens or Singapore Permanent Residents who derive income from Singapore or from outside Singapore through any trade, business, profession or vocation excluding employment under a contract of service are considered self-employed. Unlike employees, they do not contribute to all 3 CPF accounts. Instead, they are only required to contribute to their Medisave, which is computed based on their annual net trade income earned.
c) Employees working overseas
CPF contributions are not mandatory for Singaporean employees who work overseas. If you wish to continue making CPF contributions for your existing employees who are posted overseas, you may have to register for a new employer reference number before making a voluntary contribution.
Overseas employers are required to register for an employer reference number to make voluntary contributions for their Singaporean employees.
The above is only applicable for employees who are Singaporeans and Singapore Permanent Residents. The contribution is subject to the limit of $25,245 per calendar year.
This should be a good start for negotiations.
sms
