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Income Tax if sent to work outside Singapore

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Income Tax if sent to work outside Singapore

Postby beppi » Wed, 28 Oct 2009 6:11 pm

I was employed by a Singapore company (salary and CPF paid here) and sent to Taiwan to work for 8 months, during which I made only private visits to Singapore (not work).
I believe salary for such work abroad is not taxable here, even if it's paid in Singapore. Is that correct?
How is this handled by IRAS? What and how do I need to declare?
(HR has no clue, but said they'd write any letter I need.)

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Re: Income Tax if sent to work outside Singapore

Postby Strong Eagle » Wed, 28 Oct 2009 8:11 pm

beppi wrote:I was employed by a Singapore company (salary and CPF paid here) and sent to Taiwan to work for 8 months, during which I made only private visits to Singapore (not work).
I believe salary for such work abroad is not taxable here, even if it's paid in Singapore. Is that correct?
How is this handled by IRAS? What and how do I need to declare?
(HR has no clue, but said they'd write any letter I need.)


Doesn't matter where you actually worked, it matters where you are paid. You were paid in Singapore so you will be taxed in Singapore. Only if you had been paid in Taiwan, which they wouldn't want to do because of ugly work permit issues, would you not be liable for income tax in Singapore.

Rejoice! Singapore, relatively speaking, has a great income tax rate.

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Postby beppi » Wed, 28 Oct 2009 9:12 pm

I do not believe this to be correct, and it contradicts also what is written on IRAS webpage: income is taxable if it is for work in Singapore (wherever paid), so I deduce work outside of Singapore (wherever paid) should not be taxed here.
In addition, I did have a Taiwan work visa, everything legal, and am liable for taxes there (of course: I lived and worked there).
My question is more about the formalities: What and how to declare?

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Postby Strong Eagle » Wed, 28 Oct 2009 9:26 pm

So... don't believe it to be correct.

If you had a Taiwan work visa you better hope your HR is on the ball because the manner in which income is computed and reported varies from country to country.

About the only consistent thing for countries with tax treaties is that you won't be double taxed.

PS: Your statement, "income is taxable if it is for work in Singapore (wherever paid)" is a totally different circumstance from the original question you asked.

You said CPF was deducted. I guarantee your tax liability will lie here. Whether you have a second tax liability in Taiwan will depend on what your HR did.

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Postby ksl » Wed, 28 Oct 2009 9:28 pm

beppi wrote:I do not believe this to be correct, and it contradicts also what is written on IRAS webpage: income is taxable if it is for work in Singapore (wherever paid), so I deduce work outside of Singapore (wherever paid) should not be taxed here.
In addition, I did have a Taiwan work visa, everything legal, and am liable for taxes there (of course: I lived and worked there).
My question is more about the formalities: What and how to declare?

You just have to document your working period, in Taiwan, the 183 day rule applies for you to qualify, though you do need to check with IRAS showing them proof, you have paid the tax in Taiwan. And i'm not sure, but the 183 days is without travel back to Singapore in between. IRAS will clarify this, just give them a ring.

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Postby Strong Eagle » Wed, 28 Oct 2009 10:25 pm

ksl wrote:
beppi wrote:I do not believe this to be correct, and it contradicts also what is written on IRAS webpage: income is taxable if it is for work in Singapore (wherever paid), so I deduce work outside of Singapore (wherever paid) should not be taxed here.
In addition, I did have a Taiwan work visa, everything legal, and am liable for taxes there (of course: I lived and worked there).
My question is more about the formalities: What and how to declare?

You just have to document your working period, in Taiwan, the 183 day rule applies for you to qualify, though you do need to check with IRAS showing them proof, you have paid the tax in Taiwan. And i'm not sure, but the 183 days is without travel back to Singapore in between. IRAS will clarify this, just give them a ring.


Be careful ksl. The 183 day rule applies to foreigners and at this point we don't know the status of the OP. And note that there are several bridges around the 183 day deal. I don't think it is relevant here.

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Postby beppi » Wed, 28 Oct 2009 10:45 pm

I am PR and over 183 days in Taiwan, far less than 183 in Singapore (incl. private trips etc.).

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Postby ksl » Wed, 28 Oct 2009 11:04 pm

Strong Eagle wrote:
ksl wrote:
beppi wrote:I do not believe this to be correct, and it contradicts also what is written on IRAS webpage: income is taxable if it is for work in Singapore (wherever paid), so I deduce work outside of Singapore (wherever paid) should not be taxed here.
In addition, I did have a Taiwan work visa, everything legal, and am liable for taxes there (of course: I lived and worked there).
My question is more about the formalities: What and how to declare?

You just have to document your working period, in Taiwan, the 183 day rule applies for you to qualify, though you do need to check with IRAS showing them proof, you have paid the tax in Taiwan. And i'm not sure, but the 183 days is without travel back to Singapore in between. IRAS will clarify this, just give them a ring.


Be careful ksl. The 183 day rule applies to foreigners and at this point we don't know the status of the OP. And note that there are several bridges around the 183 day deal. I don't think it is relevant here.


That is quite true, that's why i said to clarify the situation with IRAS, after all, I have never heard of a tax office keeping taxes, that maybe claimed back under the tax laws, if they do not fulfil the criteria laid down, which many overseas workers fail to do, then they may lose out.

I don't think it has anything to do with his HR, it's there own responsibility, to find out the advantages or disadvantages of the overseas assignment in relation to his personal tax paid on income, either way, he would still have to document the 183 day residential rule overseas.
I don't think it is relevant here
Even more important why they need to visit or ring IRAS, that way they will get the truth of the matter for their own peace of mind, relevant to their foreign status!

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Postby Strong Eagle » Wed, 28 Oct 2009 11:31 pm

beppi... all I am going to say is this: I run a professional services company. I have placed people into multiple countries without work permits. All my employees were paid in Singapore. In all these circumstances, my employees pay Sing income tax, no tax at all in other countries because they are under the radar... 5 days, 190 days... it doesn't matter... they are Singapore citizens or PR... and the 183 day rule only applies to foreign temp work in Singapore.

I have also obtained work permits for employees in at least a couple of countries. This is much more complex. In some countries I have paid my employee in that country and he is subject to tax in that country (including that country's onerous short term non resident tax). When the employee has paid tax in another country no tax will be paid in Singapore.

In other countries I got a work permit but paid the employee in Singapore. As a company I had to jump through hoops about capital repatriation taxes and all that, but the employee paid no tax in the country where the work permit was issued and did pay tax in Singapore.

That is why it is so necessary for your HR to have a seriously large brain because you need to know how they set you up and how they filed for you in Taiwan.

But, I'll say it again... if you are a PR, and all your salary was paid in Singapore, you will only pay taxes in Singapore. Only the US, Indonesia, and Canada (under some bizarre circumstances) would double tax income.

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Postby Saint » Thu, 29 Oct 2009 8:24 am

beppi wrote:I am PR and over 183 days in Taiwan, far less than 183 in Singapore (incl. private trips etc.).


If you are a PR and getting paid in Singapore I'm assuming your pay will include CPF contributions both personal and company's? In that case you'll have to pay Singapore tax.

Well this is how I see it

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Postby Strong Eagle » Thu, 29 Oct 2009 10:09 am

This is the relevant IRAS webpage.

http://www.iras.gov.sg/irasHome/page04.aspx?id=98

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Postby beppi » Thu, 29 Oct 2009 11:29 am

The appropriate IRAS page for my case is http://www.iras.gov.sg/irasHome/page04.aspx?id=104
According to that, income for work abroad is NOT taxable, even if it is paid out in Singapore.
This confirms what I've heard before (but not what the gentlemen above stated).

My question remains: How is this handled administratively by IRAS? According to the webpage, I do not need to declare such income - so do I just declare Zero for the time in question? Do I need to show evidence that I worked abroad? What evidence?

I would appreciate if anybody with such experience replies, not just hearsay as above.

Greetings,
Frank

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Postby Strong Eagle » Thu, 29 Oct 2009 11:47 am

Look... you said CPF was collected... this means your were paid by a Singapore company. You were not paid overseas income. You were paid local income by a local firm for work you did overseas. Big difference.

I've worked in KL for 8 months straight... my Singapore company paid me. It was taxable in Singapore. If you were paid by a Singapore company your income is taxable in Singapore. If your Singapore company does not issue you with an IR8A reporting the income they paid you they will be in violation of the law.

Overseas income would be if you were paid by a Taiwan entity and it were deposited to you in Singapore, then no Singapore tax would be due. But Taiwan tax would be due. But this is not your case.

Another example of overseas income is the income I derive from rental property in the US. I pay US taxes and do not have to declare it here.

Write IRAS. They will confirm what I have said.

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Postby beppi » Thu, 29 Oct 2009 12:08 pm

Sorry, the IRAS webpage says nothing about who pays the salary, just where it is paid.
In fact, my contract (with the Singapore entity who also pays my salary) states: "The place of work shall be Taiwan at [Comany Name] Taiwan Ltd., where the Appointee renders his services for an estimated period of ..."
I was happy with this setup because I much prefer CPF to some other social security system.
It was clear from the beginning that I will be legal resident in Taiwan and have to pay tax there. HR Taiwan helps me with that, but they have no idea about Singapore taxes of course.
Singapore HR, as I mentioned, has no clue but will write anything I need for me.
So my question basically is: What do I need?

A double taxation agreement seems to exist, in case it makes a difference.

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Postby Strong Eagle » Thu, 29 Oct 2009 12:25 pm

Taiwan operates the same as Singapore: If you were paid by a Taiwan company (registered in Taiwan) you would have had withholding held from your paycheck for Taiwanese income tax payments, and it should have been withheld at a 20 percent rate.

If you were not paid by a Taiwanese entity, then the money you earned is considered overseas income by Taiwan and is not subject to tax.


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