Given the current uncertainty in the world, many Australians living in Singapore may be considering a return to Australia.
For most Australians working in Singapore, a good income coupled with low-income tax usually means that a decent amount of savings will be sitting in the bank at the end of their stint. Whilst tax is low in Singapore, it is certainly not the case in Australia.
Australian’s returning home with significant assets and wealth accumulated while in Singapore, will find the Australian taxation system will hit hard unless they make a plan!
Our Singapore E-team member, CST Tax Advisors will be participating in a webinar with St. James’s Place Wealth Management this Friday to discuss some of the important things you need to plan for while in Singapore to avoid getting bitten by the ATO when returning home to Australia.
Details of the webinar:
Date: Friday 12th June
Time: 1:00 – 1:45pm (Singapore local time)
Please click here to register for the webinar.
Members of our Singapore E-Team took part in HWA’s annual Wheel Walk or Jog and Family Carnival.
Held on 27th April at the Esplanade Park, the event includes a family carnival followed by a walk or jog with HWA wheelchair-bound members along a scenic route not more than 3.5km.
Volunteers are paired with HWA wheelchair-bound members and assist them throughout the day.
A big thank you to all the E-Team volunteers. A great day was had by all.
So you’ve settled in Singapore and decided it’s time to buy a home rather than rent. With a reputation of having some of the most expensive real estate in the world, how much do you need to have saved before this is even possible?
To work this out, lets take a look at a hypothetical scenario of two British Expats purchasing a condo for $1.5m in Katong on the east coast.
Under the most recently revised Monetary Authority of Singapore (MAS) regulations, for your first property purchase as a foreigner you should be able to borrow up to 75% of the proposed property purchase price.
On our scenario of $1.5m above, you will need to have 25% as an initial deposit which would come to $325,000.
As a foreigner, you are subject to two levels of Stamp Duty.
The first is called Buyers Stamp Duty (BSD) and is paid by all purchasers of property in Singapore.
The amount charged is progressive and the rates as of Feb 2018 are:
- 1% on the first $180,000
- 2% on the next $180,000
- 3% on the next $640,000
- 4% on the remaining amount
The second, and most significant, cost for foreigners purchasing property is the Additional Buyer Stamp Duty (ABSD).
This rate is a flat 20% against the whole purchase price of the property and can be the biggest inhibitor to purchase property in Singapore.
PLEASE NOTE: Expats from the United States, Switzerland, Liechtenstein, Norway and Iceland are exempt from the 20% additional stamp duty charge due to the Free Trade Agreements Singapore has with these countries.
So for our British expats looking to buy, their stamp duty costs would come to:
BSD – $44,600
ABSD – $300,000
Total – $344,600
So the total up-front cash our couple would need to purchase their $1.5m condo would come to $669,600.
This can be a significant amount of money for any couple. Depending on your long-term plans and personal situation though, buying can still make sense as the Singapore property has a long-term history of strong returns.
Also, if you apply and are successful in obtaining Singapore Permanent Resident Status (PR), this can bring the ABSD rate down to 5%.
If you’d like to review your borrowing options and see what is possible, don’t hesitate to get in contact with us through www.aexphl.com
Tim Raes, Founder and Managing Director
Aussie Expat Home Loans – Singapore
* This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statements and seek personalised advice
This month, we look at the Singapore system for Goods and Services Tax (“GST”) which was introduced in Singapore in 1994 and has a current rate of 7%.
In Singapore, GST is levied on the supply of goods and services in Singapore, and on the importation of goods into Singapore. In the case of a supply of goods and services, the applicable GST is collected by the supplier / seller and remitted to the Inland Revenue Authority of Singapore (“IRAS”). Where goods are imported into Singapore, the GST is collected by Singapore Customs at the point of importation.
GST can only be levied and collected if your business is registered for GST. GST registration is mandatory if your business has a taxable turnover of SGD1M and above for the next 12 months.
Taxable turnover refers to the supply of goods or services which are subject to GST. If you can show that the taxable turnover over the next 12 months for your business will be less than SGD1M, then you will not need to register for GST. If the turnover for the next 12 months is expected to exceed SGD1M, then you have 30 days to register for GST from the end of the month in which the SGD1M threshold has been exceeded.
Failure to register for GST when your business meets the threshold turnover amount may result in a fine and penalty. Where you are late with the registration, you will also have the registration commencement date backdated to the point in time that the business did exceed the SGD1M threshold. If this is the case, you will then be assessed GST during the reporting period commencing from the backdated commencement date.
If you do not exceed the taxable income threshold, you can still register voluntarily for GST if you can show that 90% of your business supplies are zero-rated. A zero-rated supply is an export of goods from Singapore or the provision of international services.
In this situation, your business will be allowed to register for GST and then claim the GST incurred on expenses in relation to the exported goods – in this situation you are typically expected to be paid a refund from IRAS as your GST collected on sales will be less than any GST paid on paid on purchases.
In Singapore, GST is customarily reported and remitted to IRAS on an invoice basis. This means that GST is payable even though the GST may not have been paid by the customer . Notwithstanding the above, if your business is registered for GST voluntarily (i.e., taxable turnover is less than SGD1M), you can apply the Cash Accounting Scheme – this Scheme allows you to report GST on a cash basis.
GST reporting is done electronically on a quarterly on monthly period, with the GST quarter determined by the financial year end for your business. The GST report is due for lodgement with IRAS within one month of the end of the reporting period.
In the return, you report all the GST collected, and GST spent in the business. The net GST is what is payable or due to you as a refund. The amount owed is taken via direct debit by IRAS from your business bank account on the 15th day after the due date for the lodgement of the GST report. Refunds are processed by IRAS and paid directly into your nominate business bank account with 7 days after the lodgement of the GST report.
As an Expat, choosing health care providers can be a daunting activity and one that can have a big impact on the entire family. Many people have anxiety and fears related to visiting doctors and dentists and this becomes compounded when in a new country where everything seems so strange. Luckily, Singapore has a very high standard of health care.
It can be just as important to have regular check-ups with a dentist as it is with a doctor; however, globally adults are neglecting to visit the dentist. So how do you find a new dentist in your Expatland City?
Lydia Astill from Expat Dental has written a guide with all information you need to find a new service provider. It’s important to choose a great dentist before you’re in pain and to have a dental practice you can trust to care for you and your family.
This publication will provide you with helpful tips to assist you in finding the right dentist for you and your family.
To read this publication, click here.
The Inland Revenue Authority of Singapore (“IRAS”) in conjunction with other statutory bodies such as the Economic Development Board and Maritime and Port Authority of Singapore provide several industry specific concessions and grants to business in Singapore.
A common requirement of these concessions and grants is the requirement for the company to be a tax resident of Singapore. Whilst we shall explore some of these programs in the coming months, it is important to consider the issue of tax residency and how it applies companies in Singapore.
In addition to access to these programs, it is important to remember that only a company who is a tax resident of Singapore can:
- Access income tax rebates;
- Have a tax exemption on foreign-sourced dividends, foreign branch profits, and foreign-sourced service income; and
- Apply the provisions of double tax agreements or limited treaties between Singapore and a foreign jurisdiction.
Residency and place of incorporation
It is important to note that the jurisdiction in which the company is incorporated does not play a role in determining whether a company is a tax resident of Singapore. This approach is very different to jurisdictions like Australia, the USA and Hong Kong, where the legislation specifically states that a company incorporated in those countries are considered as tax resident.
In Singapore, the determination of tax residency is focused upon where the company is controlled and managed during the year of assessment. This determination of corporate residency is required to be made annually, based on the facts associated with the company.
For example, a company incorporated in Hong Kong may be regarded as a tax resident of Singapore because the directors of the company have relocated to Singapore. In this therefore means that the company is a in fact a dual resident for tax purposes – Hong Kong based on incorporation and in Singapore based on control and management.
What does “control and management mean”
The concept of control and management is not defined in legislation but is rather terminology established through the common law court system over time. With a common law judicial system, Singapore relies heavily on precedents establish by other common law jurisdictions such as the UK and Australia.
The concept of control and management for a company does not mean where the day-to-day operations of the company are carried on – thus the location of trading activities and physical operations is not considered. Rather the concept of control and management is considered from a corporate governance perspective.
Generally, if the board of directors hold their meetings in Singapore, then it is considered that the control and management of a company is located and exercised in Singapore.
Examples of the types of decisions which are taken under corporate governance are:
- Where the company’s business shall be;
- Whether a company is to commence or cease operations;
- Whether an investment / acquisition is to proceed; and
- Whether a dividend is to be paid to shareholders.
What about a permanent establishment
The concept of a Permanent Establishment (“PE”) arises to determine the taxing rights of two jurisdictions. In the case of a PE, there is no question as to where control and management is located. In these situations, it is always located outside of Singapore.
A PE generally arises where a foreign corporation has some form of physical presence in a jurisdiction (e.g. construction sight, agent or employees with authority to conclude contracts).
Where a PE exists in Singapore, the profits earned by PE shall be taxed by IRAS (subject to the provisions of a Double Tax Agreement if one exists between Singapore and the home jurisdiction).
Boon Tan – CST Tax Singapore
Constant travel for business and leisure is a familiar feature of expat life in Singapore. Some of us with families even feel exhausted after the summer holiday.
With time zone differences and constant sleep interruption it’s easy to feel you are not getting enough sleep. Emerging research is abundant and spells out how sleep is important for adults and especially for teenagers.
The research has been clear that lack of sleep can cause a variety of problems. In adults some of these issues include hypertension, heart disease, fatigue, anxiety, stress, and a lack of mental clarity.
In children, attention deficit disorder, hyperactivity, bedwetting, allergies, and stunted growth and development have been associated with a lack of sleep and disordered breathing. And these problems may go on to affect school performance.
Related to this, dental ‘bruxism’ is the medical term used to describe habitual clenching or grinding of the teeth and jaw. Stiff or fatigued jaw muscles when you wake in the morning, headaches, neck aches, sensitive teeth, jaw pain, noises when opening or closing your mouth; all of these can be signs of dental bruxism and TMJ disorder.
Previously dentists were trained to think that grinding issues were just stress related and that the ultimate fix was to wear a night-guard for the rest of your life. Now practitioners believe that by retraining habits like tongue position, breathing techniques, and swallowing techniques, we can stop grinding and help patients sleep better. But, depending on the individual circumstances, oral appliances, medication or surgery may be required.
Oral Appliance Therapy can often be used to treat both snoring and obstructive sleep apnea in adults.
An oral appliance is a device similar to orthodontic retainers joined by a flexible connector and worn while asleep. The device allows your airway to remain open by supporting the lower jaw in a slightly forward position and providing forced air through flexible tubes. These devices are best designed and fitted by experienced dentists trained in sleep disorder therapy. In some severe cases, surgery may be an option for treatment.
When treating children, if caught early enough, providers may be able to prevent the need for braces and allow them to live a healthier life without a grinding habit and a sleep disorder in adulthood.
If you feel you or someone in your family may have sleep disordered breathing or sleep apnea, the sooner you can fix the problem the sooner you will be on the path to a much fuller life, free of the health issues that come with poor sleep. Ask yourself these questions and if you answer yes to a few you may want to find out more.
- feel irritable or sleepy during the day?
- have difficulty staying awake when sitting still, watching television or reading?
- fall asleep or feel very tired while driving?
- have difficulty concentrating?
- often get told by others that you look tired?
- react slowly?
- have trouble controlling your emotions?
- feel like you have to take a nap almost every day?
- require caffeinated beverages to keep yourself going
Written by: Lydia Astill from Expat Dental
Located at the tip of the Malay Peninsula, Singapore has a population of 5.7M and is recognised as one of the best places in the world for expatriate life. So, what are the important things you need to know about your personal taxes when making the move to Singapore? Common questions include:
- What type of tax system does Singapore have?
- How does the residency system work?
- What is the tax rate in Singapore?
- What are the ways for me to save tax?
- If I were to leave Singapore, what are the exit tax implications?
Salvi Yamin, Tax Manager from CST Tax Advisors have written a guide which will take you through the Singapore tax systems to provide you with an understanding on how Singapore tax systems work and enable you to plan for your tax whilst living in Singapore.
This is essential reading for any expat wanting to work in Singapore.
Download the publication here.
Are you looking to start a business in Singapore? Often been regarded as a gateway to Asia, Singapore is regarded as one of the easiest countries to do business in. This publication, written by Boon Tan, Managing Director of CST Tax Advisors Singapore explains the important tax issues you need to understand when planning or doing business in Singapore. Boon covers issues such as:
- Tax Residency for Corporations
- Corporate Tax and Rebates
- Foreign Income
- Annual Requirements
This publication is a must read for those who starting or planning to start a business.
Download the publication here.
Expatland is proud to publish our E-Team’s guide to property loans. Written by Tim Raes Director of Aussie Expat Home Loan, this document is an expat’s quick guide to Singapore’s property mortgages, refinancing and acquisition.
In this publication, Tim discusses issues such as:
- Buying a Housing Development Board Property
- Process for Loan Pre-Approval in Singapore
- Should you buy a Property in Singapore
- Mortgage Terms and Conditions
- Effect of Foreign Exchange Movement on Loans
If you are considering purchasing a property or need assistance with financing – then this is the guide for you.
Download the publication here.