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Need advice regarding income tax for PEP holder

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singpat
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Need advice regarding income tax for PEP holder

Postby singpat » Thu, 02 Jun 2011 12:12 pm

Hi,

I have a PEP and am working in Singapore as contractor via a local company (agent). They deduct my income tax based on their estimation monthly and say that they will pay on behalf of me.

When I talk to IRAS, though,they tell me that actually I am supposed to pay my tax myself. I got the GIRO installment for that.

As far as I know now, the employer is only obliged to do the tax clearance if I am changing the employer or if I leave Singapore. Both of them are not the case.

Who is right now? Because I would like to keep the money needed for the tax myself, instead of the agent. The agent will pay after the assessment is ready as well... But deduct monthly.

Hope someone can give an advice.

Many thanks in advance.

Cheers,
Singpat

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ecureilx
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Re: Need advice regarding income tax for PEP holder

Postby ecureilx » Thu, 02 Jun 2011 2:24 pm

singpat wrote:I have a PEP and am working in Singapore as contractor via a local company (agent). They deduct my income tax based on their estimation monthly and say that they will pay on behalf of me.

When I talk to IRAS, though,they tell me that actually I am supposed to pay my tax myself. I got the GIRO installment for that.


Before you come charging at me, let me clear this up .. you are responsible for your tax, but, if you run off without paying it, the employer has to pay it .. so a few companies still practice the ancient rule of deduction a % every month, and paying it back to you end of every tax year ... so you have said money to pay up your tax .. and if you depart in between, the employer can be held liable ..

what your employer is doing is a private arrangment between you and your employer. If your employer doesn't trust you, then he has every right to do it .. and even on GIRO, you vanish with 6 months to go, it is still tax somebody has to pay ..

most employers now switched to the practice of holding the last month pay, until you clear tax, but then again, a few have taken off on salary day without even notice .. maybe the savings converted back to a house back home .. and they couldn't care less ..

That's my 2 cents worth advice ..

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Postby singpat » Thu, 02 Jun 2011 2:39 pm

Hi ecureiflx,

Thanks for the comment. Appreciate it, especially because of the disclaimer in you signature ;)

So it all comes down to trust. Well, then I have to add that I am a bit suspicious. Because the agent doesn't need to worry about me running away. I get very good money and work in a very good project and my contract doesn't let me out easily.

The trust issue is a difficult one then. Because if they have the right to withhold it, then I have the same right to pay for myself.

The current agrement is, that because the law obliges them to to do so I have to accept it. And that is not true, for sure. Trust issue again, ehh?

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Postby ecureilx » Thu, 02 Jun 2011 3:30 pm

singpat wrote:Because the agent doesn't need to worry about me running away. I get very good money and work in a very good project and my contract doesn't let me out easily.


Then again, there have been some minority agents, who refuse to pay you back your deduction .. and so have been some small employers .. :D :D

And I stress,they are the minute minority ..

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Postby Strong Eagle » Thu, 02 Jun 2011 4:43 pm

singpat wrote:Hi ecureiflx,

Thanks for the comment. Appreciate it, especially because of the disclaimer in you signature ;)

So it all comes down to trust. Well, then I have to add that I am a bit suspicious. Because the agent doesn't need to worry about me running away. I get very good money and work in a very good project and my contract doesn't let me out easily.

The trust issue is a difficult one then. Because if they have the right to withhold it, then I have the same right to pay for myself.

The current agrement is, that because the law obliges them to to do so I have to accept it. And that is not true, for sure. Trust issue again, ehh?


What does your contract say about withholding?

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Postby ecureilx » Thu, 02 Jun 2011 4:55 pm

Strong Eagle wrote:What does your contract say about withholding?


I may plunge in and take a bet that the contract will not say anything about the with-holding .. as, that is covered under the laws of Singapore, which include .. employer as responsible for unpaid taxes ..

I maybe wrong though ..

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Postby singpat » Thu, 02 Jun 2011 5:07 pm

You are absolutely right. The contract doesn't mention anything regarding tax.

You are also right that the employer is responsible for unpaid tax in case I leave the company or the country.

But as I said, I am not planning to leave Singapore soon and the project that I am assigned to is on-going for the next 2 years.

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Postby ecureilx » Thu, 02 Jun 2011 5:32 pm

singpat wrote:But as I said, I am not planning to leave Singapore soon and the project that I am assigned to is on-going for the next 2 years.


Not to offend you, that's what everybody says .. and then at the first chance of Australia or Canada looking attractive, things go tipsy turvy ..

And I know dozens, if not more, who swore that they have every intention to complete the contract et al, but suddenly vanished into the thin air, only for me to get an email from NYC, or SFO, or Vancouver or Auckland .. :D :D

And of late, the vanishing acts are more prevalent than before ..

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Postby Strong Eagle » Thu, 02 Jun 2011 5:48 pm

The simple solution is to ensure that each month you receive a paycheck stub that shows your gross pay, deduction type and amount, and net pay. This way, the company protects itself, and you are protected with hard evidence in the event you have difficulty collecting the withheld tax amount.

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Salary

Postby ecureilx » Thu, 02 Jun 2011 5:52 pm

SE: OP says he engaged by an agent, and agents do get creative at times ...

A sobering story .. for some bedtime reading ..

http://yawningbread.wordpress.com/2011/ ... s-dont-go/


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