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Income Tax if sent to work outside Singapore

Discuss about getting a well paid job or career advancement. Ask about salaries, expat packages, CPF & taxes for expatriate.

beppi
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Postby beppi » Thu, 29 Oct 2009 12:39 pm

Strong Eagle: This is definitely untrue!
Income received for work in Taiwan is always taxable there, no matter where and how it is paid. The same rules apply in Singapore and most other countries!
If it weren't like this, everybody in the world would just arrange to get paid in some no-tax haven, no matter where they worked, and governments would go broke soon.
Sorry, but it is not that easy to avoid financially contributing to the country you live and work in. Neither is it morally o.k. (in my opinion)!

It is true that they couldn't withheld the tax from my salary, as it wasn't paid in Taiwan - that only means I have to pay later.
But that is not the question here: I just want to know about the procedures of not paying additional tax in Singapore, a country I didn't live and work in during that time.

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Postby Saint » Thu, 29 Oct 2009 12:47 pm

No wondor the locals are giving us PRs a bad time if this is the tricks PRs are trying to play. So you are very happy to be a PR, pay your CPF and get nice contribution from your SINGAPORE company but you want to avoid paying Singapore income tax!!

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Postby beppi » Thu, 29 Oct 2009 12:53 pm

Strong Eagle: Of course there are some dodgy foreign companies who send their people to Taiwan (or elsewhere) on "business" or even "visitor" visa. In that case the worker is technically illegal and thus pays no tax (you called it "under the radar", but it's still illegal!).
In many cases, the authorities close both eyes (especially if the work benefits the local economy), but if found out, the illegal worker goes to jail, has to pay fines and is banned from Taiwan, while the employer has no problems. This has happened with employees of Western high-tech engineering firms I personally know, so I very much hope your service company isn't one of these unscrupulous employers who go the easy way without regards for their people's long-term benefits!
Last edited by beppi on Thu, 29 Oct 2009 1:01 pm, edited 1 time in total.

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Postby beppi » Thu, 29 Oct 2009 1:00 pm

Saint: The Singapore company who paid me is a local office of an MNC. They voluntarily paid my CPF here (which again is allowed by Singapore law). The alternative would have been payment by their Taiwan entity: Same money, just from a different pocket!
I don't see how this can possibly be wrong, as you implied?

I do think, however, that double taxation is wrong, and so do many governments (incl. obviously the Taiwan and Singapore government).
Honestly, I would LOVE to pay tax in Singapore instead, as the rates are much lower than in Taiwan, but it's just not going to happen - the case for taxability in Taiwan is very clear!

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Postby Saint » Thu, 29 Oct 2009 1:06 pm

beppi wrote:Saint: The Singapore company who paid me is a local office of an MNC. They voluntarily paid my CPF here (which again is allowed by Singapore law). The alternative would have been payment by their Taiwan entity: Same money, just from a different pocket!
I don't see how this can possibly be wrong, as you implied?



Company CPF contributions aren't voluntary but a legal requirement for all Citizens and PRs and the CPF amount payable is based on the taxable income earnt in Singapore

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Postby beppi » Thu, 29 Oct 2009 1:14 pm

Saint wrote:Company CPF contributions aren't voluntary but a legal requirement for all Citizens and PRs and the CPF amount payable is based on the taxable income earnt in Singapore


CPF is only required for all Citizens and PRs working in Singapore.

In my case the company had a choice of paying me in Singapore (with CPF) or elsewhere (without CPF, but of course I would have asked for some other benefits in replacement).
If there are choices and you take one of them, I call it voluntary.

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Postby jpatokal » Thu, 29 Oct 2009 1:34 pm

beppi wrote:CPF is only required for all Citizens and PRs working in Singapore.

In my case the company had a choice of paying me in Singapore (with CPF) or elsewhere (without CPF, but of course I would have asked for some other benefits in replacement).


That's right. You work in Singapore, you pay CPF in Singapore, you pay tax -- drum roll -- in Singapore. And since you are presumably a Singaporean citizen, you don't even qualify for the NOR scheme.

Seriously, if you're having such a hard time believing us, call IRAS and ask them. You don't even need to give your NRIC.
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Postby beppi » Thu, 29 Oct 2009 1:50 pm

I just called IRAS and got the definitive answer.

Income received for work abroad is NOT taxable in Singapore.
My case falls under this.
It does NOT matter where it is paid and if CPF contributed.
In my tax declaration, I just need to declare ZERO income for the period.
If IRAS has any questions, they will contact me. For that case they advised me to prepare some evidence of my residence and work abroad (e.g. work permit there, work contract or letter by the company).

As usual when dealing with Singapore government offices, everything is as easy and clear as possible. I love this country!

Case closed, all of you above were wrong!

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Postby econoMIC » Thu, 29 Oct 2009 4:43 pm

Morning guys. Strong Eagle, JP, we had this discussion before, remember (although JP wasn't involved)? You pay tax where you live, not where you are paid. If you invoice through your company which is registered overseas it is a different issue but for normal employment in pretty much every country on this planet you pay taxes where you live (plus any additional that the US government imposes for Americans). Also important to note: a legal residence and a residence for tax purposes are two different things. So the rule of thumb for the majority of countries (apart from the middle east) is 183 days of residence a year. If you are more than 183 days in a country than you are a tax resident of that country for that tax year. If it is less different rules apply. This is not to be mistaken for the 183 day tax rule for foreigners which is similar though. So KSL has a point to some degree. This is because 183 days is half a year and so always the determinant for tax residency in common dual taxation agreements.

http://www.iras.gov.sg/irasHome/page04.aspx?id=104 wrote:Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable. This includes overseas income paid into a Singapore bank account.

You do not need to declare overseas income that is not taxable.

When is it taxable

Overseas income is taxable in Singapore if...

It is received in Singapore through partnerships in Singapore.
Your overseas employment is incidental to your Singapore employment. That is, as part of your work here, you need to travel overseas.
You are employed outside Singapore on behalf of Government of Singapore.


If beppi is not paid through a partnership in Singapore (ie. he is employed by a normal incorporate company) and he wasn't employed by the government then he does not have to pay tax as stated above. If he was posted for 8 months this means it wasn't incidental but a posting and the 183 day rule applies.

Bottom line, you might be liable to pay Taiwanese Income tax beppi. Whether that works to your advantage or not is a different issue.
Last edited by econoMIC on Thu, 29 Oct 2009 4:55 pm, edited 2 times in total.
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Postby ksl » Thu, 29 Oct 2009 4:49 pm

beppi wrote:I just called IRAS and got the definitive answer.

Income received for work abroad is NOT taxable in Singapore.
My case falls under this.
It does NOT matter where it is paid and if CPF contributed.
In my tax declaration, I just need to declare ZERO income for the period.
If IRAS has any questions, they will contact me. For that case they advised me to prepare some evidence of my residence and work abroad (e.g. work permit there, work contract or letter by the company).

As usual when dealing with Singapore government offices, everything is as easy and clear as possible. I love this country!

Case closed, all of you above were wrong!
Was i wrong too :roll: I was quite sure the 183 day rule applied, within the tax year, to avoid paying tax in both Countries, that is the rule to meet residential tax laws, and to avoid paying tax in the home Country. Only USA is different.

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Postby Saint » Thu, 29 Oct 2009 4:58 pm

So if I ever want to go and work back in the UK for my current company I just make sure the Singapore office pay my salary in to my Singapore account and I'll never pay any tax!

Not that I would ever want to go back to the UK!

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Postby beppi » Thu, 29 Oct 2009 5:11 pm

Saint wrote:So if I ever want to go and work back in the UK for my current company I just make sure the Singapore office pay my salary in to my Singapore account and I'll never pay any tax!


What is so difficult to understand about this?!?

If you live and work in a country (and this applies to most countries, probably also UK), then you have to pay tax THERE on the income you receive for that work - NO MATTER WHERE AND HOW YOU RECEIVE IT!
You will not have to pay tax on that income IN SINGAPORE, because you do not live and work here.
Thus your scenario above makes absolutely no difference tax-wise. It might make tax evasion easier, but that remains a criminal act.

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Postby ksl » Thu, 29 Oct 2009 6:01 pm

Saint wrote:So if I ever want to go and work back in the UK for my current company I just make sure the Singapore office pay my salary in to my Singapore account and I'll never pay any tax!

Not that I would ever want to go back to the UK!
While you are working in UK, you would be liable for UK tax after 183 days and not necessarily Singapore tax, depending on the tax agreements in place.

Most Countries have the same universal rule, that for tax reasons one becomes residential automatically after 183 days, though it is always the individuals liability to check, with their tax office, some Countries may not have any agreement in place, and one would then be double taxed. Proof of tax paid in the other Country is almost always requested, not only the documentation, you was out of the Country, no proof and you would be taxed in both Countries, depending on the agreements in place between those Countries involved. One can always back date the claims too, for a number of years I think 7, if you have been taxed unfairly.
Last edited by ksl on Fri, 30 Oct 2009 12:28 am, edited 1 time in total.

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Postby Saint » Fri, 30 Oct 2009 12:24 am

ksl wrote:
Saint wrote:So if I ever want to go and work back in the UK for my current company I just make sure the Singapore office pay my salary in to my Singapore account and I'll never pay any tax!

Not that I would ever want to go back to the UK!
While you are working in UK, you would be liable for UK tax after 183 days and not necessarily Singapore tax, depending on the tax agreements in place.

Most Countries the have the same universal rule, that for tax reasons one becomes residential automatically after 183 days, though it is always the individuals liability to check, with their tax office, some Countries may not have any agreement in place, and one would then be double taxed. Proof of tax paid in the other Country is almost always requested, not only the documentation, you was out of the Country, no proof and you would be taxed in both Countries, depending on the agreements in place between those Countries involved. One can always back date the claims too, for a number of years I think 7, if you have been taxed unfairly.


It was slightly said in jest

I still don't understand why the OP who is a PR married to a local with a child who are living here in Singapore would prefer to pay his tax in Taiwan rather than in Singapore? As he's mentioned, there's a double tax agreement in place between Singapore and Taiwan so I'm not sure why he's hell bent on not paying Singapore tax?

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Postby ksl » Fri, 30 Oct 2009 12:32 am

Saint wrote:
ksl wrote:
Saint wrote:So if I ever want to go and work back in the UK for my current company I just make sure the Singapore office pay my salary in to my Singapore account and I'll never pay any tax!

Not that I would ever want to go back to the UK!
While you are working in UK, you would be liable for UK tax after 183 days and not necessarily Singapore tax, depending on the tax agreements in place.

Most Countries the have the same universal rule, that for tax reasons one becomes residential automatically after 183 days, though it is always the individuals liability to check, with their tax office, some Countries may not have any agreement in place, and one would then be double taxed. Proof of tax paid in the other Country is almost always requested, not only the documentation, you was out of the Country, no proof and you would be taxed in both Countries, depending on the agreements in place between those Countries involved. One can always back date the claims too, for a number of years I think 7, if you have been taxed unfairly.


It was slightly said in jest

I still don't understand why the OP who is a PR married to a local with a child who are living here in Singapore would prefer to pay his tax in Taiwan rather than in Singapore? As he's mentioned, there's a double tax agreement in place between Singapore and Taiwan so I'm not sure why he's hell bent on not paying Singapore tax?


I don't think he prefers to pay it in Taiwan, I believe the situation is you pay tax after the 183 day rule, so he is forced to pay tax in Taiwan, no way out of it, because he becomes resident after the 183 days. and None resident in Singerpore, which may allow him not to pay Singapore tax. I mean no one really wants to pay double tax if they can help it. Americans unfortunately have to pay something while working abroad!

One of my DJ friends worked in Greece for the season 6 months, tax was deducted from his income, because he couldn't document the payment of tax in Greece, he was hit with another tax bill in Denmark. It turns out his employer had kept the money and not paid his tax in Greece.

Without the correct procedures being followed the guy left himself wide open to be cheated, it's an individuals responsibility to the tax office in both Countries, to ensure tax is paid, otherwise you get crucified with interest too. Though it works both ways normally the tax office in Denmark for example will also pay interest on the over payments


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