There are several issues to understand about how work-related travel affects your tax status.
Here are two of the most important factors to consider:
Your Residency Status
Generally, you will be regarded as a tax resident of Singapore if you have been in the country for 183 days during the calendar year. However, even if you haven’t been in the country for this duration, you will still be regarded as a tax resident, if you’ve been residing in Singapore on a permanent basis.
Residing in Singapore means that you have established yourself, and perhaps with your family, here – your children are enrolled in a local or international school, and you have a Singapore-based bank account.
Where Your Salary is Paid
If you are a holder of an Employment Pass, all your remuneration in relation to your employment in Singapore will be subject to tax here. Any work-related travel outside of Singapore will be regarded as being incidental to your Singapore-based employment.
What you should consider is whether you have become a tax resident of the country you most frequently travel to. If your travel results in you being regarded as a tax resident of another country, you will need to confirm whether Singapore has a double-tax agreement (DTA) with that other country. If there is a DTA signed, you will then need to look at whether there is an article to prevent double taxation on your remuneration.
These articles look at the time spent in these other countries and where your remuneration is being claimed as a deduction for tax purposes. Even if you are required to pay tax in Singapore and any countries you frequently travel to, there are sections in the Income Tax Act for you to claim a credit for the tax paid in these other countries when you file your Singapore tax return.
Given the complexities of this area of tax, you should speak with a qualified advisor when filing your return, particularly if you have undertaken a great deal of work-related travel this year.
Managing Director (Singapore), Boon Tan
Boon Tan is the Managing Director of CST Tax Advisors in Singapore. CST Tax Advisors provide tax and accounting advice, compliance services for individuals or families based in Singapore, global founders and SMEs expanding to Singapore, and organisations employing expatriates. For queries on your personal affairs, please visit www.csttax.com.sg/thefinder.
From The Finder Issue 301, December 2019 / Photo: 123RF.com
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