7 Frequently Asked Questions About Tax Planning for Australians Living in Singapore

By Shane Coelho

Where is my tax residence and domicile?

Knowing your residence and domicile is very important for tax purposes both in Australia and Singapore. The difference between the two is vital in determining the right guidelines in ensuring you’re not evading the tax.

The domicile is the status or attribution of being a lawful permanent resident in a particular jurisdiction.

Your domicile is important in determining your tax liabilities. These can be from your employment or income generating investments, capital gains & inheritance tax.

What’s capital gain tax?

Tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets

https://www.bir.gov.ph/index.php/tax-information/capital-gains-tax.html

example:

If you purchase an Apple share for $100 and you decide to sell it after the share price has risen to $120, you have made a $20 gain (profit). You may be liable to pay tax on the $20 gain you have made.

What are the requirements for tax return filing?

Annual Tax Filing Process (Foreigners)

Income tax is payable on income earned in the previous year. You should report your full income earned in Singapore in your tax return.

Generally, if you have received any letter, form or SMS informing you to file an Income Tax Return, you must file regardless of:

The amount of your annual income in the previous year; or whether your employer is participating in the Auto-Inclusion Scheme (AIS) for Employment Income.

You have to submit your completed paper tax form to IRAS by 15 Apr. If you e-File, you have up to 18 April to do so.

If you have not received any notification to file but your annual income is more than $22,000 in the preceding year, you must inform us of your chargeability unless your income is exempted under the Income Tax Act or you have been informed that filing is not necessary.

https://www.iras.gov.sg/irashome/Individuals/Foreigners/Filing-your-taxes/Annual-Tax-Filing-Process--Foreigners-/

Where to pay my taxes?

You can pay your taxes in one lump sum

Or

Sign up for GIRO to enjoy up to 12 monthly interest-free instalments to pay your income tax. Other payment methods include AXS station, AXS e-station/m-station, SAM Kiosk, SAM web/mobile or internet banking

https://www.iras.gov.sg/IRASHome/Individuals/Foreigners/Learning-the-basics/Basic-Guide-for-New-Individual-Taxpayers--Foreigners-/

Getting Tax Clearance

If you are about to leave Singapore or are changing to another job within Singapore , you must settle all your taxes. This process is known as tax clearance. For tax clearance, your current employer must notify IRAS and make sure you have paid all taxes before you cease employment with them.

If you still hold any existing stock options or awards on hand which have yet to be exercised or vested, you will be considered to have derived gains from the stock or awards at the point of tax clearance.

What are the special tax deductions I can get? Relief for Non-Residents (Section 40 Relief)

This is a special relief to reduce the overall taxes of certain categories of non-residents such as:

  • A non-resident Singapore Citizen; or
  • A non-resident deriving pension income from Singapore; or
  • A non-resident residing in the Netherlands (where reciprocal relief is provided under the Singapore-Netherlands Tax Treaty).

Indicate your claim for Section 40 Relief by crossing the box in your Form M. The Section 40 Relief will be computed automatically for you.

Do I pay tax in Australia on my Singapore source income when I move to Australia, if I don’t bring it to Australia?

You must report all your foreign employment income in your Australian tax return – both assessable income and exempt income. You must do this even if tax was taken out in the country where you earned the income.

Foreign employment income is income earned by an Australian resident working overseas as an employee. It includes salary, wages, commissions, bonuses and allowances. It may be paid by an overseas or an Australian employer.

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Going-overseas/Working-overseas/Reporting-your-foreign-employment-income/

Here at JPARA whilst we are not tax advisers, we can help you plan your finances tax efficiently. We always recommend for you to seek independent tax advice for your jurisdiction.


JPARA Financial Advisory is a boutique licensed financial advisory firm that represents the interests of its clients through insurance, risk products, wealth management and investment advice for both local and Expatriate markets here in Singapore. Our financial consultants have years of experience in financial planning, providing clients a world-class service.

JPARA is one of the leading financial advisory firms in Singapore for over 10 years. We are regulated and licensed by Monetary Authority of Singapore (MAS).

For more information about Retirement Planning, please contact JPARA at +65 68297025 or email enquiry@jpara.com | www.jpara.com