Cazador wrote:Hello Everyone,
Thank you all for the wealth of information contained on this website. My wife and I are moving to Singapore from the United States in July. My wife will work on an employment pass; I will have a DP. We currently live in Denver, Colorado, USA, where I am a lawyer. I am not employed by a law firm. Instead, I own a single-member LLC that contracts with law firms to provide freelance legal writing services (and I take the occasional client). In short, I am a freelance legal writer and all of my clients are in Denver.
I have seen a number of posts on this board regarding freelancing in Singapore on a DP, but would appreciate any clarification on the following subjects:
1. To your knowledge, would I run afoul of any Singapore laws by providing freelance legal work to law firms in the United States while on a DP? I would do the writing on a laptop (mainly from my condo, but perhaps from the occasional café), email the documents to Colorado clients, and participate in phone calls with Colorado clients. No work product would be sold in Singapore and no services would be provided to companies or individuals in Singapore.
If you wanted to, you could file for a LOC and be "official" in Singapore. However, as noted above, the income is not taxable anyway, and I'd just let it fly under the radar. You affect zero jobs in Singapore.2. Would I need to go through the (at this point) daunting process of obtaining authorization for this business with the MOM via an LOC or can I do my work without this document because of its nature?
3. All of my income for work done in Singapore will be deposited into an American bank account by American companies. May I then transfer the funds to my Singapore bank (a process I have already worked out) without running afoul of your answers to questions 1 and 2.
I am not a lawyer, and, the IRAS website divides individuals into resident and non-resident taxpayers. Non resident taxpayers don't need to file tax returns at all if all the income is earned outside Singapore.4. It is important to note that I am not trying to avoid paying Singapore taxes. On the contrary, I would like to file a Singapore tax return under this scheme without obtaining an LOC or other similar document. Can I simply file a personal income tax return in Singapore without owning a Singapore business based on the information above?
Thank you all in advance for any knowledge -- personal or otherwise -- that you can provide.
Maybe "flying under the radar" is the wrong term to use. It is pretty clear that IRAS says that money earned overseas is not taxable. It is also pretty clear that there are no specific laws or regulations governing your situation, and that makes perfect sense. You affect zero jobs in Singapore. You cost the government zero dollars. You don't even exist in your transactions. So, rather than saying, "under the radar", it would be appropriate to say there is no law that prevents this activity, and no law that requires reporting of income or payment of tax.Cazador wrote:Strong Eagle,
Thank you for the quick and helpful reply -- I appreciate it! A few follow-up questions, if you have the time:
1. Flying under the radar is very tempting at this point, for ease of execution if for no other reason. By doing this, I assume you mean maintaining business as usual in Colorado, but doing the work in Singapore. That is, maintaining clients in the U.S., getting paid into a U.S. bank account, and paying U.S. taxes. Do you know folks for whom this path has worked? It seems the only way this plan would fail is having authorities notice large transfers into a Singapore bank account. In your opinion, would it be better to only move small amounts at a time? And the real question, am I just getting too worried about a simple issue?
You need to stop in at the Careers forum. LOC's are not that hard to get, especially if you demonstrate expertise, experience, and the opportunity to earn income that will generate Singapore tax revenues. You would need a local nominee director to start a private limited, and there has been a recent poster that got a LOC as a sole proprietorship.2. If I did want to make things official with the MOM, you suggested obtaining a LOC. However, I understood these to be nearly impossible to obtain, especially for a DP holder like me that just does solo legal consulting overseas and would not have a local sponsor, etc. Thoughts? Are there certain factors weighing in my favor, such as profession, income, and lack of interference with local business?
Again, thanks for taking the time to help me out.
Regards,
Cazador
Your law firm's tax advisors are a bunch of nincompoops. Let's split this into two sections.Duckfan wrote:Hi Cazador, I was happy to find this thread as I am in a similar position. I am moving to Singapore this summer because my spouse is relocating there for business and I'll be on a DP. My law firm is willing to allow me to work remotely from Singapore, same points apply: U.S. firm (no offices abroad), work performed will only be for U.S. clients and will have absolutely no connection to Singapore, and I'll be paid into my U.S. bank account.
The firm's tax advisors are suddenly concerned that simply by my telecommuting presence in Singapore, the firm will somehow become obligated to pay corporate tax to Singapore. That's false, right? Since I don't have to pay Singapore income tax, why would they?
Any insight on this would be greatly appreciated.
Edited to add: hmm, I just noticed that the IRAS provision that says that income received from outside Singapore is nontaxable applies to sole proprietors/people who are self-employed. I'm not, obviously, since I have an employer. Wouldn't the income still be nontaxable, though, simply by virtue of the fact that it has no connection to Singapore? I'm not moving there at the behest of my employer and won't be doing any firm business there - I'm moving there because my spouse is.
Sounds to me rather like they think they'd found a cherry-patch of fees, in investigating that one.Duckfan wrote: The firm's tax advisors are suddenly concerned that simply by my telecommuting presence in Singapore, the firm will somehow become obligated to pay corporate tax to Singapore.
This is patently NOT correct. From the IRAS website: http://www.iras.gov.sg/irasHome/page04.aspx?id=154katbh wrote:The issue is really that the services are provided IN Singapore and are potentially taxable if you live here for 6 months + 1 day per year. Your clients, like mine, may not even know you are in Singapore, but you are doing the work here - regardless of it being by internet.
Further, the IRAS site directly deals with "professional" income derived overseas.Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable. These include overseas income paid into a Singapore bank account.
You do not need to declare overseas income that is not taxable.
The meaning is clear. It is where the business is conducted, not where the work is performed. Duckfan's firm is clearly not conducting business in Singapore. It invoices in the USA. Your assertion that because Duckfan works from a PC in Singapore somehow makes him liable for tax is unsupported by any law or regulation I can find. Perhaps you'll provide the citation that supports your assertion?3.1 Foreign-sourced Income
Foreign income that does not arise from a trade or business carried on
in Singapore.
Foreign-sourced service income
Service income refers to income from professional, technical,
consultancy or other services provided by a specified resident taxpayer
in the course of its trade, profession or business. Such service income
is considered foreign-sourced if the services are provided through a
fixed place of operation in a foreign country. If the services are not
provided through a fixed place of operation in a foreign country, the
service income will be considered Singapore-sourced even though:
a. The income is derived from services rendered outside Singapore;
and
b. Tax is payable in that foreign country in accordance with the
provisions of a DTA with the foreign country.
6.4 A fixed place of operation refers to a place of management, an office or
some floor space where the specified resident taxpayer or its
employees provide the services.
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