You are subject to tax in Singapore from the date you arrive in the country.
The Singaporean tax system uses a territorial basis of taxation, meaning it only taxes income sourced here. The term “sourced” means income that is generated in Singapore such as employment income, interest paid by a local bank and the like.
Foreign income, such as rental income from your principal residence or investment property in your home jurisdiction, is not taxed in Singapore – even if you bring the funds to Singapore. All passive income from bank interest, dividends and capital gains from the disposal of assets are exempt from tax in Singapore, too.
When is the Tax Year?
The tax year for individuals follows the calendar year. As an employee, you should receive a report each March from your employer outlining your gross earnings for the past financial year. This report will either be provided to you as Form IR8A or reported directly to the Inland Revenue Authority of Singapore (IRAS).
As an employee, an important distinction to note is there is no pay-as-you-go withholding on your salary. This means you will receive your gross income and must manage your own tax obligation each year. For cash flow management, you may wish to establish a second bank account to transfer a proportion of your monthly salary to cover the annual tax payable.
When do I File My Returns?
Due 15 April each year, lodging your return is done online via your myTax Portal with IRAS. If your employer has reported your earnings for the year directly to IRAS, the information is already pre-populated for you to review and submit if correct.
Once your return is assessed, you may either remit the tax liability as a lump sum or alternatively, establish a monthly direct debit with IRAS from your bank account (not credit card) over eight to 10 months.
What are Common Tax Reliefs for Expats?
Spouse relief, $2000: Where you support a spouse, who is not working and/or earning less than $4,000 from worldwide sources.
Child relief, $4,000 per child: To cover the cost of supporting a child, regardless of where they live. Each child must be aged less than 16, or if older than 16, in fulltime education. Your child must also have income of less than $4,000 from worldwide sources.
Life insurance premiums: You can apply a tax relief of up to $5,000 for the payment of life insurance premiums if your insurance provider has a branch or presence in Singapore.
Managing Director — Singapore
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. Should you have any queries on your personal affairs, please visit www.csttax.com.sg/thefinder.
From The Finder (Issue 299) , June 2019
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