Can anyone confirm the tax status if I have share options already granted, but not yet vested, once I relocate to Singapore for employment with the same employer? i.e. these share options were granted in 2008 and 2010 respectively, vesting over 4 years, and I plan to relocate to Singapore in 2011 with the same employer. Will these need to be declared and/or taxed while in Singapore?
The IRAS site here
seems to indicate they won't be taxed.
ESOP/ESOW plans granted while an individual is NOT exercising employment in Singapore
The gains from any ESOP/ESOW plans are not taxable in Singapore even if the ESOP/ESOW plans are exercised/vested while you are physically present in Singapore or holding an employment in Singapore.
Does this sound pretty watertight, that they won't be subject to taxation? I won't be transferring any of the money into Singapore either.
Hi, i am an undergraduate who recently completed my taxation module. I can help you with the question.
For ESOPs, you will only be taxed if they were sourced from SG. In your situation, your ESOP were granted for employment outside of SG, and so if you were to exercise them even though you are in SG, you will not be taxed.
If you were granted ESOP pertaining to your employment in SG and were to exercise them, you will be taxed based on no. of shares x (stock price on day of exercise - exercise price of stock options granted). If you happen to have a moratorium period of say 6months, then the taxable benefit is no. of shares x (stock price 6 mths from the day you exercised - exercise price of stock options granted)
This taxable benefit will be assessed based on the progressive income tax rate.
edited by moderator
more info here: http://www.iras.gov.sg/irasHome/page04.aspx?id=8978
more info on other taxable benefits here: http://www.iras.gov.sg/irasHome/page.aspx?id=2890