Expatriate Tax Planning In Singapore

As a contractor in Singapore, two of your biggest tax concerns are probably going to be:

  1. Paying less taxes, and
  2. Reducing the admin involved in paying them.

Maybe these goals are obvious, but actually achieving them takes some planning. Having a strategy is crucial, because you may be able to work completely tax free.

Expatriate Tax Planning In Singapore

Organising your taxes in Singapore yourself

Singaporean income tax laws change quite regularly, but they’re not especially complicated. Where it gets tricky is being sure of your tax residency and income sources, as well as dealing with any double taxation issues. Generally, if you’re contracting in Singapore then you'll be liable for local tax, but the exact rate depends on your residency.

There are different rules with regards to resident and non-resident status. Local residents are taxed at 2-20% whereas non-residents are taxed at the higher value of either a flat 15% or the progressive 2-20% tax rates.

However, the big kicker for local residents is the compulsory CPF contributions of a further 20% of earnings. Additionally if, for example, you are an American contractor working in Singapore, you are still taxed as a US citizen on your worldwide income by the US government. You will get a tax offset on any Singaporean taxes paid, but it removes much of the benefit of being a non-resident tax payer in Singapore. As you can see, it can get complicated quickly, and doing your own taxes makes it harder to be sure you are claiming all potential allowances and tax offsets. If you really want to understand it, you need to have a professional advisor.

Can employers organise Singapore expatriate taxation?

Yes, some can.

Unfortunately for a lot of contractors, though, most clients don’t offer that service to freelance workers. This route requires little to no effort from you, but it can be a huge burden to pick and choose your clients based on which ones can offer this service.

Are there any other options for expatriate tax in Singapore?

Many contractors choose to work under an Umbrella Company.

An Umbrella Company will calculate what you owe in taxes and fees, and process your payments. They act as your “employer,” although you still work exactly like you would as a contractor.

This allows you to pay as you earn, similar to having an employer or client organise your taxes. In this scenario, however, you don’t have to worry about who’s going to organise your taxes each time you take on a new contract. 

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