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Is tax deducted if I have spent only 1 month in Singapore?

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nsureshb
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Is tax deducted if I have spent only 1 month in Singapore?

Postby nsureshb » Mon, 14 Dec 2009 10:31 pm

Dear all, I started work in Singapore on 1st December 2009 and I have been issued an EP for 1 year from 3rd Dec 2009 for 1 year. I am an Indian citizen and am working as a Senior Technical consultant for an IT company here. How is my tax calculated on my salary and when is it deducted? I read in many forums that if your stay in Singapore in the YA is less than 183 days then it is not taxable but some stated that a flat 15% is charged as tax. What is the actual procedure and when should I file my returns?

Thanks

Suresh N

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Re: Is tax deducted if I have spent only 1 month in Singapor

Postby sundaymorningstaple » Mon, 14 Dec 2009 10:46 pm

nsureshb wrote:Dear all, I started work in Singapore on 1st December 2009 and I have been issued an EP for 1 year from 3rd Dec 2009 for 1 year. I am an Indian citizen and am working as a Senior Technical consultant for an IT company here. How is my tax calculated on my salary and when is it deducted? I read in many forums that if your stay in Singapore in the YA is less than 183 days then it is not taxable but some stated that a flat 15% is charged as tax. What is the actual procedure and when should I file my returns?

Thanks

Suresh N


Okay, here's the deal.....

If you are here on short term employment and are here for 60 days or less, you do not have to pay income tax on those monies earned.

HOWEVER!

If you will read the following quote from IRAS's website carefully you will see where the glitch lies......

If You are Employed for 60 Days or Less in a Year......

You will be regarded as a non-resident. Your employment income is exempt from tax if you are here on short-term employment. The number of days in Singapore include weekends and public holidays. This exemption does not apply if you are a director of a company, a public entertainer or exercising a profession in Singapore. Professionals include foreign experts, foreign speakers, queen's counsels, consultants, trainers, coaches etc.


So, yes, you need to pay non-resident tax rates at the flat rate of 15% on that income.

However, once you have been here for 183 consecutive days straddling two tax years, you can file an amended return, giving them your bank account number and they will giro the excess payment back into your bank account (if you qualified for resident rates then as long as you earned less than 20K you will not have any tax liability) However, you still have to go through the motions. Protocol!

sms

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Postby wcs » Tue, 15 Dec 2009 2:06 am

Interesting topic...

In my case I have a temporary EP whilst a PR application is being processed. The visa is only valid for three months. It starts on 30 Nov 2009 and ends on 27 Feb 2010.

I have been in Singapore for more than 60 days this year, but not on an employment pass. It has been a mix of student pass and social visit passes.

From what I read above I probably would not need to pay tax. However it is tempting just to do it to avoid any future recriminations. Tax here is so low anyway.

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Postby sundaymorningstaple » Tue, 15 Dec 2009 6:52 am

From what I read from your post, I'd say you are a landed PR and normally, yes. That income is taxable in the same scenario as the previous poster as you are employed NOT for the short term. The EP has been granted for a specific reason and that is to facilitate the processing of your PR. The very nature of the chop will let ICA who has already notified IRAS & MOM that the chops is only to allow the PR to start working legally until the PR is issued.

However, if you have been in the country MORE than 60 days as it would seem then, YES you also need to file a tax return in this case and pay taxes at the 15% flat rate and then file the amended return later once you have been here 183 days. But for any other readers, that is only because his length of stay has exceeded 60 days but is less than 183 days in the current tax year so he is required by law to pay a flat rate of 15%.

All of this is assuming your arrival here was after the 1 of July this year. If you were here before the first of July, than you have been here longer than 183 days, therefore would be treated as a resident for tax purposes. It doesn't mean you have to work that long, but it's counted from the day your arrived in Singapore.

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Postby wcs » Tue, 15 Dec 2009 12:07 pm

I have been here for 19 months now. Whilst on my student visa I was expressly prohibited from working as a full fee paying student. Then on the social visit pass I was also prohibited from working.

On the student pass I was considered a resident, but on the social visit pass, I was only considered a visitor.

If it is total number of days in the calendar year on the student pass and temporary EP then it is less than 183 days, but more than 60 days.

If it is total number of days in the country regardless of whether I am a visitor, then it is more than 183 days. But that would also mean that any foreign sourced income would be tax free as far as Singapore is concerned?!

No wonder tax lawyers make so much money!

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Postby sundaymorningstaple » Tue, 15 Dec 2009 1:13 pm

Doesn't matter what visa you were on. If you where in Singapore longer thatn 183 days in 2009 then you qualify for resident rates.

http://www.iras.gov.sg/irasHome/page04. ... _in_a_year

This is regardless of the type of visa you are on. As long as your are physically present in Singapore.

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Postby wcs » Tue, 15 Dec 2009 4:03 pm

Thanks for clarifying that. Now, I get to do my first tax return here! :)

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Postby M606022 » Mon, 28 Dec 2009 10:28 am

question here?

1. if i plan to leave Singapore next year, should i work more/less than 183 days in the to maximize my tax save? or there is no difference as I have been here for 1 and a half years?

2. Is their any tax allowance that ppl with EP can claim? or it is only a benefit of PR?

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Postby sundaymorningstaple » Mon, 28 Dec 2009 1:38 pm

M606022 wrote:question here?

1. if i plan to leave Singapore next year, should i work more/less than 183 days in the to maximize my tax save? or there is no difference as I have been here for 1 and a half years?

Makes no difference as you have already been here more than 183 days.


2. Is their any tax allowance that ppl with EP can claim? or it is only a benefit of PR?

There are no difference in the tax structure with regards to EP vrs PR. Unless you want to count the deduction of a PR's CPF contributions from his income. But as a EP holder you don't have to contribute to PR so you have the actual usage of the money. 6 of one, half a dozen of the other.

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Postby M606022 » Mon, 28 Dec 2009 1:53 pm

ok, thanks for advice.

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Postby SpecialK » Tue, 12 Jan 2010 9:35 pm

Hello, another question. Apologies in answered already.

I'm told my tax out there will be considerably lower. Will i need to pay 15 % each month until i have been here for 183 days.

Any response is very much appreciated.

Thanks

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Postby sundaymorningstaple » Tue, 12 Jan 2010 11:28 pm

Singapore generally does not have a PAYG system. All taxes are paid between 1 Jan and 15 April of the year following the tax year (the tax filing season is identical to the US). Assuming you have worked throughout the end of the year. There is no withholding except for your last month of employment (if you are on an Employment Pass). Citizen/PR doesn't apply. For partial year, IRAS (Tax Department) requires the employer to withhold your last or possibly last 1+ months salary and the Employer must file an IR-21 (Tax Clearance) on your behalf. The IRAS will then send the employer a tax bill and they are required to pay said taxes from your final salary before giving you any balance that may or may not remain. If the employer doesn't, then they can be fined up to $1000 for each instance, so you can bet they will do so. Knowing this now will save you considerable grief later when you don't get that last paycheck.

Now, the upside of that is that you have to give your employer 1 month's notice (or more). If the employer doesn't like you, he can file the tax clearance manually and it will take up to 30 days to be processed. However, if the employer files it online, it will be processed within two weeks. But, no, there is no monthly withholding like the US system.

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Postby Peachy.pie » Tue, 19 Jan 2010 9:27 pm

Hi, im so grateful that I found this forum. Im a foreign worker and have left SG after being employed from jul 09, 2009-dec 29, 2009 and until now I haven't received my last paycheck. I wanna know how they calculate my tax coz my employer mentioned to me it will be deducted from my last paycheck. It's less than 183 days and my monthly gross is 2050. CAn you please help me?

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Postby sundaymorningstaple » Tue, 19 Jan 2010 11:04 pm

On a gross salary of approximately $12,128 the taxes would be in the neighbourhood of $1,819 SGD.


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