stiwi wrote:Perhaps I won't be staying in Singapore forever, so I like to consider options I would have in case when I decide to leave.
My first question is in regards to company resident status:
1. Would the company itself be considered as a resident if I would become non resident? I know that Pte Ltd has to have at least one resident director, so I can appoint nominee director for this purpose. I just seek clarification on company residency matter as after reading IRAS definition I am uncertain.
I maybe wrong here but I think the company would still be a resident company if two directors whereby one is a local albeit company secretary and the other person is you whom is an FT
2nd question is in terms of individual residency and tax matters:
2. I am employed as MD under EP at Pte Ltd that I am the only director of. Does it make sense to keep EP in place once I would decide to leave? If yes, what are the best, in terms of taxes, options to keep such EP?
Since the company taxes here is lower, and if you are migrating to another country which has double taxation agreement with SG, then you will enjoy paying lower taxes. As long as you pay your taxes here, your EP is safe.
a) Salaries would incur 15% tax.
Not sure on this, I think you have to adhere to the 183 days rule. You might to need to check with IRAS on this. Others may be able to shed more light
b) Director's fees 20%.
Not sure on this. please check with IRAS. I cannot help on this
c) I read about 60 day rule for each year. Does it mean I wouldn't have to pay any taxes when I wouldn't visit Singapore in such year or when I would spend there 60 days or less per calendar year?
IRAS explanation on 60 day rule: "Your short-term employment income is exempt from tax. This rule does not apply if you are a director of a company..." Does it mean MD on EP is excluded from this tax exemption?
No , I think you got it wrong. When you are salaried and you hold an MD post you are tax since the company belongs to you. The above is meant for employees that is working for you
3. It looks like the easiest would be to cancel EP, keep the company running, pay-out the dividends. As I understand, dividends paid to shareholders remain tax free regardless of the director residence status.
Yes that is correct but be careful when you are transferring money to another country as it can be seen as an income and it will be tax
Any ideas would be appreciated.
This is something I wouldn't be so sure about. DTA treaties usually allow you to pay a tax difference on your salaried income and not to not pay any taxes being a non-resident of Singapore.Since the company taxes here is lower, and if you are migrating to another country which has double taxation agreement with SG, then you will enjoy paying lower taxes. As long as you pay your taxes here, your EP is safe.
There will be no Singapore tax due on those dividends as the company is under the one-tier tax system, but personal income tax will almost certainly be due in your country of residence (where you spend 183+ days a year) as very few countries apart from Singapore would allow for it to remain tax-free.stiwi wrote:As I understand, dividends paid to shareholders remain tax free regardless of the director residence status.
You are right aster. In most cases it seems that being a resident of other country, you would have to pay a full personal income tax on dividends paid from SG company.aster wrote:Keep in mind that there isn't anything to offset tax-wise on dividend income as there simply is no tax on it in Singapore, so I don't think there is any DTA benefit here (especially since you cannot deduct Singapore corporation tax against the personal income tax in your country of residence).
This is a tricky one. I would still say that you would "technically" only end up paying once because in general tax on dividends is paid on a personal level anyway. To end up being "hit" twice you would have to pay personal income tax on those dividends in two places, but as Singapore won't tax you then it'll only be once (let me rephrase that: a maximum of one time) no matter where you live.stiwi wrote:since you cannot deduct SG corporate tax against personal income in other country, you would end up paying tax twice...
You will be hit once as you say, as long as you don't declare such income from dividends in foreign country that you are a resident of and which wants to tax you on your worldwide income as most countries do nowadays.aster wrote: This is a tricky one. I would still say that you would "technically" only end up paying once because in general tax on dividends is paid on a personal level anyway. To end up being "hit" twice you would have to pay personal income tax on those dividends in two places, but as Singapore won't tax you then it'll only be once (let me rephrase that: a maximum of one time) no matter where you live.
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