How does taxes work when working in multiple countries?

[hzzz]

Hi All,

I am from the US and will be moving to a new job based off Singapore. The job involves managing the Asia region and requires extensive traveling mostly between Singapore and China. According to what I've read, if I stay in Singapore for more than half of a year then I will be categorized as a resident and taxed accordingly. If I stay in Singapore for less than that I will be taxed at 15%/higher resident rate . This part I understand.

Given the work requirements, one realistic scenario would be that I work in Singapore for 160 days, China for 160 days, then the US for 30 days and elsewhere for 15 days. Do I have to file taxes with each country? I am thinking since China has higher tax rate, I will probably be going there multiple times under visitor status (I have relatives there) but stay there for no longer than 30 days per visit. In such as scenario do I still have to have pay taxes in China? How about the US? I have some rental income here but as long as I stay in the US for less than 35 days I think I can exempt up to $95K USD?

A separate question: My wife will likely to continue her job here in the US in the short term so I will likely to use her health coverage. Does this mean that I am covered in terms of sickness/death insurance? How does BlueCrossBlueShield work for healthcare services in Singapore?

TIA.

[beppi]

International taxes are a complex jungle and every country makes their own rules with disregard to the others. Then there is a maze of tax treaties between some countries (others not) that prevent double taxation in most cases (it can still happen, as well as the opposite).
You need a very good tax consultant with experience in international tax law. They are rare and expensive, but you have no other choice!
You won't get an exhaustive answer here, because even those laymen who looked into these matters (out of necessity, like me) don't understand and cannot explain the intricacies. It's extremely complicated and can cost you a lot of money (or not, if do the right things)!

[sundaymorningstaple]

Provided you qualify, the Income Tax Abroad Exclusion will only allow you to exclude "up to" 95K/PA BUT that is only "earned Income" e.g., wages. Self employment, investment, interest, dividends, Farm or Business income and rental income are fully taxable at the rate they would have been taxed at had the wage income NOT been excludable (e.g., the prevailing top tax rate useable had no income been excludable.

[Strong Eagle]

If you have a Singapore employment pass and your official residence is in Singapore, then you are a Singapore resident for tax purposes, even if you travel extensively. This also assumes that you are being paid in Singapore, even when you are in China.

As SMS noted, you are entitled to the foreign earned income exclusion but there is a kicker... if you are in the US for more than a certain period of time... I want to say three weeks... then you lose the exclusion.

You would be wise to ensure that you know how much time you will spend in the US working, and make sure your compensation covers double taxation.

[beppi]

SE, this is not true - at least not in all cases:
I was seconded to Indonesia by my Singapore employer a number of years back when I was still on EP, but had a residence and was paid in Singapore. I had to pay tax in Indo, like all work visa holders there, and NOT in Singapore. A letter from my employer saying I didn't work in Singapore was enough for IRAS to not tax me.

[sundaymorningstaple]

This is true. Singapore says regardless of your work permit, you are only taxed on income earned "IN" Singapore. That which is earned while seconded to another country is not taxed.

http://www.iras.gov.sg/irasHome/page.aspx?id=8502

However:

Your overseas employment is incidental to your Singapore employment. That is, as part of your work here, you need to travel overseas.

At that point it becomes taxable in Singapore as well and tax treaties or tax credits will have to be utilized if both countries tax you. Or, your employer will need to equalize your salary to offset the foreign taxes.

[zzm9980]

Singapore taxs are easy. As mentioned above, you pay 15% or the appropriate rate (whichever is higher) under 180 days, or the appropriate rate over 180 days. If you're on an EP and you work 180+ contiguous days but not all in the first tax year you start, they only charge you the lower rate It is either refunded later, or they only assess you the lower rate based off your EP's expiration date. I've read conflicting info on that.


You'll pay US taxs regardless. If you're outside the US for over 330 days, the first ~$92k of earned income is exempt. (This isn't a deduction though. There are implications to that)


If you're in China for over 180(?) days I believe, you'll pay China taxes also. I don't know the details on this, except my former company was *Extremely* careful to juggle schedules so that no employees were there over 180 days in a year.

So basically, go see a tax specialist familiar with Singapore, US, and China tax codes. Shouldn't be too hard to find one in Singapore.

[zzm9980]

Oh, two more addendums:

That rental income in the US isn't considered "earned" (thanks SMS btw for pointing out the "earned" part), so that will all be taxed in the US.

The China thing was 180(?) days cumulative, so multiple short trips can still trigger it.

Health insurance is completely different in Singapore. No idea if your US company will cover you, that's going to be very company specific. However in my short time here, it seems most 'routine' medical bills I've had are less in total than just the co-pay on my US bills. And I had a rather generous insurance package. Example, I had an ear infection. S$28 was what I paid to walk in without an appointment, see a doctor in 5 minutes, get two prescriptions, and have a follow-up check-up the next day. The Wife had a dental checkup, cleaning, x-rays, and two fillings. S$260ish. This was a walk-in at 2pm, and she got a 3:30 appt, which they profusely apologized for her having to wait at all. Right before i left the US, I had an x-ray and one filling, and my co-pay was about $180. (I'd day of about $900 total). I had to schedule that 6 weeks out.

[sundaymorningstaple]

zzm, a slight adjustment to your Singapore resident tax rates durations. It's 183 days and not 180. Make a big difference. IRAS doesn't budge on the dates, and I actually had to tell employees to stick around Singapore after leaving their jobs for a extra week or two to ensure they exceeded the 183 days. And yes, you can straddle two consecutive tax years to qualify, provided they are consecutive days.

Point of clarification on consecutive days. This does not mean you cannot travel out of the country during this time. As long as you are holding a valid EP your time counter is ticking even if you are out of the country (provided the employer still has you employed that is - you can't do a runner with the EP!) Don't laugh, I've had some Regional Asians try to do just that.

http://www.iras.gov.sg/irasHome/page04.aspx?id=6140

[zzm9980]

Thanks for the extra info! I have my EP so should be OK.

US will f%*& me though

[sundaymorningstaple]

After a while you get inured to it. I've been here just shy of 30 years!