The 183 day rule (tax residency)

[aster]

Could someone please clarify how IRAS treats days in which someone arrives in or leaves Singapore at a certain time? How are they counted?

[Mad Scientist]

Hi

Resident Tax is ALMOST similar to many countries although the number of days might differ. Countries like China , OZ, Malaysia and even European countries have these. There a few tweaking here and there but general rule is similar.
Basically if you are on EP or PR who is working or conducting a legitmate business and stayed in SG for a minimum of 183 days at one stretch, you are subjected to a Residence Tax or Personal Income Tax or Company Tax in Singapore.Since you will be paid here, the SG TaxMan says you are taxable.

There is a thread that might clarify alot of your queries
http://forum.singaporeexpats.com/ftopic3445.html

Hope this helps('')
Mad Scientist

[aster]

The days don't have to be in one stretch. It's just about whether you spend at least 183 days in Singapore in a given year.

My question is how do they treat days in which you fly in or fly out? Is there any rule here?

[Mad Scientist]

I have attached the thread on my previous post for you to read done by SMS

E-mail to IRD SG might help.They are rather quite helpful. To my understanding is it will be based on your entry and exit date which count as two days in total that you have stayed in SG.

The Immigration and Nine Other Department(and counting) is all linked. So, they will know if you have accumulated how many days etc by your entry and exit to and from SG
MS

[aster]

Many thanks, for some reason I cannot access any of the attached information in that thread (must be a browser issue - though I have tried both FF/Safari).

So being in Singapore at any time during a given day includes it in the 183-day count, right? So if I was to fly somewhere on Friday and return on Sunday then only 1 day would be treated as being away from Singapore?

[sundaymorningstaple]

I believe you only need to worry about that if you are not on a work visa. e.g., you are here on a social visit pass.

If you are here on a visit pass for lets say, from 16 Jun and you find a job on 20 July and gain an EP for same. You will have been here for 199 days which mean you would qualify for resident rates. If you go away for a holiday after having your employment pass it shouldn't affect your status as you are on a regular employment visa.

Having said that, I have sent an enquiry to IRAS to get verification of same. Will post answer when I get it.

sms

[aster]

I was checking out http://www.iras.gov.sg/irasHome/page01.aspx?id=88 and straight off the bat (for foreigners working in Singapore) they make you click on:

- If you are here for 183 days or more (tax resident)
...or...
- If you are here for less than 183 days (non-resident)

It would be great if being here for 183+ days meant you were regarded as a tax resident, while being here for less gave you a choice on how you want to be treated. In my case I need to be treated as a tax resident or else I'd have to pay the 15% flat tax for non-residents...

[sundaymorningstaple]

I believe I've answered that just recently elsewhere on here. If you are here less than the requisite 183 days, you have to pay the flat 15% rate but at the same time, if you have already passed the 183 days across two years before the end of the filing season, I believe you could file your return and file an amended return once past the 183 day point in 2010 and get a refund of the taxes. (Not sure if they will automatically adjust the amount before sending you a tax bill or not but it's highly possible.)

[aster]

I have heard of this 2 year thing before somewhere (probably while digging through the IRAS site), sounds interesting.

Last year I spent over 183 days in Singapore, but this year it'll be borderline, so just waiting for IRAS to clear up whether days in which I fly in or out are also treated as days spent in Singapore. Would be good news if that were so.

[aster]

Just got a reply from them that doesn't address my question at all. Guess I have to write again...

If I finally do get a response, is it legally binding in any way?

[sundaymorningstaple]

I believe you only need to worry about that if you are not on a work visa. e.g., you are here on a social visit pass.

If you are here on a visit pass for lets say, from 16 Jun and you find a job on 20 July and gain an EP for same. You will have been here for 199 days which mean you would qualify for resident rates. If you go away for a holiday after having your employment pass it shouldn't affect your status as you are on a regular employment visa.

Having said that, I have sent an enquiry to IRAS to get verification of same. Will post answer when I get it.

sms

From the IRAS this afternoon......

Dear SMS,

Under our tax residency rules, you will be regarded as a tax resident if you stay or work in Singapore for at least 183 days in a calendar year. The number of days in Singapore include weekends and public holidays.

Please note that foreign employees who are issued with work passes of at least 1 year validity are treated as tax residents upfront. However, they will be treated as non-residents if they have not met the 183-day requirement when they cease employment.

Hence the leave taken by the employee will not affect the residency status as it is taken when he is still in employment with the company.

regards

Yours sincerely

So in answer to asters' question, provided you work pass is valid for more than one year you don't have a problem unless you leave your employ before 183 days have elapsed.

[aster]

Thanks SMS! So if my pass is valid until Q1 2011, then the number of days I spend in Singapore in 2010 doesn't matter as I will be treated as a tax resident even if I don't make the 183-day count this year?

[sundaymorningstaple]

Correct.

[Mad Scientist]

I was checking out http://www.iras.gov.sg/irasHome/page01.aspx?id=88 and straight off the bat (for foreigners working in Singapore) they make you click on:

- If you are here for 183 days or more (tax resident)
...or...
- If you are here for less than 183 days (non-resident)

It would be great if being here for 183+ days meant you were regarded as a tax resident, while being here for less gave you a choice on how you want to be treated. In my case I need to be treated as a tax resident or else I'd have to pay the 15% flat tax for non-residents...

I had my auditor to e-mail to IRA. This is what they reply in summary

1. If you are on social visit , you cannot work but can conduct business i.e meeting, discussion.As long as you are not paid for your time in SG. No money is involved.

2. If you are on EP 183 days kicks in. IRA does not really go into exact on the days . But 183 days is the guideline. If you are wanting to be taxed here even the days are short of 1 or 2, they will oblige and you will be under tax resident. IRA would prefer you to pay tax here as you have earned your income in SG.

3. Lastly IRA said if you have any issues on your tax, get a queue number and talk to their frontline, they will help you out.

4. From my encounter, IRA frontline are very obliging as long as you pay the $$$. Be honest and plead.

Hope this help. I stand to be corrected if this info is conflicting

MS

[sundaymorningstaple]

2. If you are on EP 183 days kicks in. IRA does not really go into exact on the days . But 183 days is the guideline. If you are wanting to be taxed here even the days are short of 1 or 2, they will oblige and you will be under tax resident. IRA would prefer you to pay tax here as you have earned your income in SG.

This is incorrect. The 183 days starts from the day you arrive in Singapore. This is regardless of whether it's a SVP or and EP. That is why, when an IR-21 is filed (Tax Clearance for leaving Singapore) not only does it ask for your commencement date and date of departure, it also ask for your "arrival" date as stamped in your Passport.