Taking a holiday before Tax Clearance complete

[ctwp]

Hi all,

Quick question on the tax clearance process... My wife has a PEP and is in the process of changing employers. Her last day with her current employer is today (31st May), and I believe they have done all the right things, including filing for tax clearance, withholding salary since notice was given etc.

We fully intend to stay in Singapore and she'll be transferring to a new company in late June after we take a well-earned holiday overseas.

Question is: will she be able to leave Singapore to go on holiday later this week? I'm concerned that as she will have left her employment but not yet done tax clearance that she'll be prevented from leaving...

Looking at the MyTax portal it shows her 2011 tax amount as having payment due (she filed on time but the IRAS hasn't yet issued her notice of assessment so she hasn't paid it yet) but with a date of 3/6/2011 (future). It also shows an amount due for 2012 with the same future date, which I assume is because the company filed for her tax clearance.

Anyone know if we'll face issues leaving for a 3-week holiday later this week? Since she hasn't been issued her notice of assessment for 2011 OR been advised of outstanding tax to pay as a result of her leaving her current employment, the ball's not in our court! We're not leaving for good, just for a couple of weeks R&R - we have the return ticket to prove it, plus my continuing employment under a P1 EP.

Thanks!

[sundaymorningstaple]

If the company has filed the IR-21 properly, it will show the amount of salaries withheld. At the point it is the onus of the employer to pay your tax liability and then deduct it from your remaining salaries before giving you the balance. The employer is been appointed as the tax agent once the IR-21 has been lodged so there shouldn't be any problem with taking a vacation provided said IR-21 was filed one month before the final day of work. It only takes 7 to 10 days max to have the tax liability computed and posted to the employers IRAS account for retrieval.

[BillyB]

I had a similar issue with waiting for an employer to file tax clearance and needing to leave SG. I went to IRAS to clarify the the situation and everything was sorted out in 10 minutes. I took the new offer letter as proof of continuing to work in Singapore.

I'm not sure how it sits given that there are two amounts of tax that will be pending payment. You may also have to pay the 2012 monies before clearance is given - although I have heard cases when IRAS doesn't enforce this if you are continuing to remain and work in SG.

To save the speculation, I'd call or pop down to IRAS to clarify.

[sundaymorningstaple]

Both the previous tax year and the current tax year to date will be shown on the IR-21 when it is submitted and if the previous tax year has not yet been paid, the bill will include the total for both the previous and the YA2012 tax bills. Should they return to work (if IRAS doesn't give a letter) just file the 2012 assessment as per normal, the taxes already paid will be credited to the outstanding taxes for YA 2012, no problems.

[carteki]

It is possible to request that you don't have to pay the 2012 tax if you can prove that your wife is has a new job that she will start shortly. You just need to drop down to Newton and visit them. Payment will then be made as per usual.

[BillyB]

Both the previous tax year and the current tax year to date will be shown on the IR-21 when it is submitted and if the previous tax year has not yet been paid, the bill will include the total for both the previous and the YA2012 tax bills. Should they return to work (if IRAS doesn't give a letter) just file the 2012 assessment as per normal, the taxes already paid will be credited to the outstanding taxes for YA 2012, no problems.

The only issue is that IRAS don't pay interest on any monies paid to them in advance!!

[sundaymorningstaple]

It's not an issue if it's the law. But if they will give you a letter absolving you of the necessity of doing it, then it's still not an issue?

[BillyB]

Of course not!!

Inconvenience would have been a better word in that rather than giving IRAS your hard earned money, you can make a return off it before your tax is due!!

I've heard of some cases when it's been paid as a necessity, even with further employment in SG. And others where they haven't requested it.

[aster]

When it comes to this "tax clearance" and salary withholding, is this something that absolutely has to be done? Or if you own 100% shares in the company and know that all taxes will be paid in full then you can skip this and not bother?

I guess in essence I'm asking whether this is something that only "kicks in" and is looked at when someone defaults/runs off/etc.?

[sundaymorningstaple]

Technically, if a tax clearance is required and the employer doesn't file it, then the employer can be fined $1000 per instance/employee. Once filed, the passport/FIN is flagged by IRAS at ICA until such time as it's been paid by the employer. Now how often, consistently, regularly they do this, or if there are quantums that much be passed, tax wise, before it's don't I don't really know, others than the ability is there and has been used.

[aster]

This reminds me a bit of another rule whereby a company has to notify IRAS when an employee leaves Singapore for more than 90 days.

How important is this one? If someone leaves for a few days longer than that but returns then is there an issue? Or is defaulting/doing a runner the real "trigger" here?

[sundaymorningstaple]

It would depend on whether or not the Employment Pass/Work Permit has been canceled or not. If it's still not canceled, then the IRAS would still accept that the employee is still employed, e.g., on out-station duty. However, if there ended up with no income taxes being filed, then somebody gonna pay. Likely the employer and the employer would likely be in deep brown stuff for deliberately keeping the guy on the Employment Pass.

[ausinsg]

So I am in this situation too. I want to go away for a short trip and I have a tax reassessment hanging over my head.

I filed my income tax return for YE 2011, and it was assessed with me as a resident; I had worked here for 10.5 months.

I did not know the assessment was completed as it went to my former employer's registered business address; their accountant.

My former employer filed the IR21? form and a re-assessment was made adding on the amount I earnt from them last year on top of my whole year's income (including the amount I had already earnt from them and declared)!

This was also assessed at 15%. They included another assessment for my YE 2012 salary too, also at 15%.

I received the re-assessment at my home address as I was no longer employed. I had switched to a PEP at the conclusion of my job, and recently took on an internship.

I called the IRAS helpline, and the guy was friendly and helpful. He told me to send through an email showing the breakdown of income between the two employers for YE 2011. Then if I can show I am currently employed the YE 2012 assessment can be reassessed, and as I am still remaining in Singapore and the amount will be taxed at the resident rate. He said that it could be completed in a week, and I would still be able to go away.

So I send that through. They asked for a letter of offer showing my date of commencement, and I sent through the electronic version of that, which has no signature on it.

I then follow up with a scan of my notification to MOM as it has the boss's signature and IC number and the company stamp, and the all important date of commencement. I provided this as it gives them the details they need as my PEP card has no employer on it.

I received an email today asking for my letter of offer with a signature. I call them up and spend ages on the line with the guy. He can see the MOM form with all the signatures and stamps, but the important thing is a letter of offer with a signature on, and they can do nothing without it. I try to reason...why would an employer who is not offering me a job, send a form with his IC, signature and company stamp on it to MOM saying he is giving me a job with the same title and salary and date of commencement, if he really was not giving me a job. But it must have been the cold meds I am on making me think logic and reason would work.

He says I can ask for an expedited assessment which takes a week. I thought I was going through the expedited process, as advised by the initial IRAS officer a week and a half ago.

This new fellow tells me if I send the documents to the same officer then they will get them and can act faster than if I send a new email cause it will go in a queue. But each of my emails has been answered by a different person, and they all use a generic email account address when dealing with me!

The reason I am going through all this mess is because of a trip away this weekend. I am not sure how the systems link but I believe with a tax assessment outstanding, I will not be able to clear immigration, despite going away for only 4 days. I can show that I have a job here, have been living here since 2008, have paid my YE 2011 initial tax assessment, and have an employment pass allowing me to reside here until 2016.

So I print it out the letter of offer and have the boss sign it, email it, my MOM notification form again, and my PEP to the officer. I have asked for an expedited reassessment.

However I have a feeling I will have to pay thousands of dollars to IRAS tomorrow so I can be sure I can go away on the weekend and hope this guy's advice that I can claim back an overpayment after a reassessment is accurate.

I know. I am totally at fault for not sending in the right documents.

Has anyone had good or bad experiences either doing a trip with an outstanding tax clearance? Or paying it up front and claiming the money back from the govt?

I'd love some positive news about now!

[ausinsg]

I have had success, and just in the nick of time too.

Continuing the story. I called back IRAS the next day to see if they now had everything they needed. The help desk boy, put me through to a lady who looked at my case. She advised that it was worth filling out a NR-R form to have my status converted from Non-resident to Resident.

After a few hours of trawling email, diaries and passports to track every trip out of singapore over the last three years, I was able to submit that. Then called to see if it had been received. She said it had and to call back tomorrow to check on the status.

Just after lunch today I received an email advising that my status is now as a resident, the tax has been recalculated and I am free to leave the country.

I checked on the MyTaxPortal and followed up with a couple of queries, but basically it is all good. It really does make a difference if just one or two people handle a case instead of the queue!

So I felt I should share my good news!