Sunday, June 20, 2010

Singapore Tax Research

Need to find out the tax rate, the resident and non-resident tax, 180 days etc.

if stay more 183 consider resident rate as below..

Tax rates for non-resident individuals

Employment income

Your employment income is taxed at 15% or resident rate,

whichever gives rise to a higher tax amount.

How about the withholding tax?

Payment for services rendered

Where payment is made to a non-resident company for the installation of equipment,

technical support services, training, consultancy or other services provided

by the non-resident company, withholding tax is applicable on the service fees

attributable to work done in Singapore.

If the payer pays for monthly allowance of the non-resident company's employees who

are sent to Singapore to perform the services, withholding tax is applicable on

the allowance because the monthly allowance is actually additional service fees paid

to the non-resident company.

However, if the non-resident company provides the services via electronic means

overseas (e.g. internet presentation, email and telephone) without sending staff to

Singapore, the services are rendered outside Singapore and withholding tax is

not applicable.

Look at seem like if stay less then 183 days, and if the payment already deduct the withholding tax, there is no tax issue..

Q5. My consultant is engaged by me for a period of 45 days. I have deducted 15% tax from the fee paid to him. Does he need to file the tax form issued to him?

As his physical stay in Singapore is less than 183 days, he will be treated as a non-resident for tax purposes. If he is only in receipt of such fee for the year, he does not need to file the tax form as you have deducted 15% withholding tax. If he has received a tax form / tax bill, please forward the Confirmation of Payment for our review.

Q6. I engage a non-resident professional to work for 5 months in Singapore. His home country has a tax treaty with Singapore. Do I still need to withhold tax on the payment made to him?

Whether you need to withhold tax would depend on whether the visiting professional needs to pay tax in Singapore under the provisions of the tax treaty. For example, under the tax treaty between Singapore and United Kingdom, the income derived by the non-resident professional from Singapore will be tax exempt provided:

a. He does not have a fixed base regularly available to him in Singapore for the purpose of performing his activities; or

b. He is not present in Singapore for not more than 183 days in any period of 12 months commencing or ending in the fiscal year concerned

Example 1

If he (with no fixed base in Singapore) is in Singapore for a 5-month engagement in year 2008, his income derived during that period will be tax-exempt for Year of Assessment (YA) 2009 (See Chart 1).

Chart 1: Tax Exempt for YA 2009 as presence in Singapore < 183 days

Example 2

However, if he comes to Singapore for another 5-month engagement in year 2009, his income derived from the first engagement in 2008 will then be taxable in Singapore in YA 2009 as he would have been present in Singapore for periods exceeding the aggregate of 183 days in the first 12-month period commencing from 1 July 2008 (See Chart 2).

His income derived from the second engagement in 2009 will be taxable in Singapore in YA 2010 as he would be present in Singapore for periods exceeding the

aggregate of 183 days in the second 12-month period ending 31 July 2009 (See Chart 2).

Chart 2: Taxable for YA 2009 and YA 2010 as physical presence in Singapore > 183 days in first 12-month period from 1 Jul 2008 to 30 Jun 2009 and second 12-month period from 1 Aug 2008 to 31 Jul 2009 respectively

Here got another information which is conflict with

Who are foreign employers?

Foreign employers include representative offices registered with International Enterprise Singapore and other entities not registered in Singapore. Foreign employers are considered as non-resident employers for tax purposes

Do I have to pay tax if I am employed by a foreign employer?

You will be taxed on income earned for the period you worked in Singapore even if your employer is not a resident in Singapore, or your income is not paid in Singapore. This also applies if your employer sends you here for training

Taxable income includes salary, bonus, allowances, honorarium, per diem, accommodation, leave passages, and value of any benefits-in-kind (e.g. food, transport) provided to you.

Any allowances received from local sponsor companies are also taxable

· If you work in Singapore for 60 days or less in a calendar year, you will be exempt from tax on your earnings here.

· If you work in Singapore for 61 to 182 days in a calendar year, your income will be taxed at 15% orresident rates for individuals, whichever gives the higher tax.

· If you work in Singapore for 183 days or more in a calendar year, your income will be taxed at resident rates for individuals.

· If your stay covers three continuous years or more, your income for all years will be taxed at resident rates.

1 comment:

justin albert said...

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