US Expat Taxes Explained: Filing Taxes as an American Living in Singapore
How working in Singapore impacts your US expat taxes
Singapore is attractive for its low crime rate, cleanliness and global culture. How does moving to Singapore affect your US expat taxes? Are you considering joining one of the other 1.31 million expatriates currently residing in Singapore? This article will help educate about the tax implications of such a move and specifically how your US expat taxes will be impacted.
US Expat Taxes in Singapore
As a US citizen, you are required to report your worldwide income one your US expat taxes each year, regardless of the country in which you reside.
In addition to the regular income tax return, you could also be required to file an informational return on your assets held in foreign bank accounts with Foreign Bank and Other Account Reporting (FBAR) Form 114, in addition to Form 8938 Statement of Specified Foreign Financial Assets.
While the US is one of the few governments that tax the international income of their citizens and permanent residents who reside overseas, it does have special provisions to help protect them from double taxation including:
- The foreign earned income exclusion allows you to decrease your taxable income on US expat taxes by the first $103,900 in 2018 earned as a result of your labors while a resident of a foreign country ($105,900 in 2019).
- The foreign tax credit — if a US Citizen’s residence in another country prompts a tax liability in the foreign country, they will likely be eligible to claim a credit for the foreign income taxes paid on their US expat taxes.
- The foreign housing exclusion — allows taxpayers to exclude some housing expenses from their US expat taxes, in excess of certain country-specific amounts.
The end objective is that your US expat taxes should be minimal, if not eliminated.
Singapore Income Tax Rates
Comparatively speaking, Singapore has low individual income tax rates. Similar to most other systems, residents are taxed on a progressive system as follows:
|Income (SGD, Singapore DOLLAR)||%|
A US expat is considered resident for tax purposes if he or she lived or worked in Singapore for at least 183 days. As a non-resident, your tax will be calculated at 15% of your employment rate, or the progressive rate table shown above, whichever is greater. All other non-employment income is taxed at 20%. Singapore does not impose tax on capital gain or inheritances. However, they do impose a 3% Goods and Services Tax (GST) on all domestic consumption purchases.
Singapore Tax Due Date
If you are considered a resident of Singapore, you are required to file your Singapore tax return via Form B1 by April 15th of each year. This is similar to the payment due date for your US expat taxes. Self-employed individuals report their earnings via Form B, and non-resident individuals report their earnings via Form M. Although these tax returns are due on April 15th, the tax payment associated with that return is not due until after the notices are mailed. Notices are usually mailed sometime in September. You have one month from the date that the assessment is mailed to pay the tax. This is very different from your US expat taxes, where any and all tax payments are due by April 15th.
If you made less than 22,000SGD, you are not required to file a Singapore tax return. In addition, many Singapore employers will submit salary information directly to the Inland Revenue Authority of Singapore (IRAS). In the absence of any other income, this eliminates your filing requirement to the IRAS.
Social Security Impact on Your US Expat Taxes
The Singapore equivalent of Social Security is called the Central Provident Fund (CPF). As an expatriate, you are not required to make payments into the Singapore CPF. You will be once you have been approved for permanent residency status by the Immigration and Checkpoint Authority of Singapore. If you decide to become a permanent resident of Singapore, you and your employer will both make contributions into the CPF. The total contribution on your behalf into CPF will total 30% of your annual salary, with 10% coming from your employer and the remainder coming from you.
If you are a US citizen and self-employed in a foreign country, you are still required to pay US Social Security and Medicare taxes on your earnings. You will pay both the employee and employer portion via Schedule SE on your US Expat Taxes. However, if you are an employee of a foreign employer and required to pay taxes into the foreign country’s social security equivalent, you are not required to pay US Social Security tax.
Is Foreign Income Taxed in Singapore?
Singapore assesses tax on income earned within Singapore or by Singapore residents. You are considered a resident for tax purposes if you have lived or worked in Singapore for at least 183 days in the preceding year. Expatriates will not be subject to Singapore tax for income earned outside of Singapore. If you have lived or worked in Singapore for less than 60 days, none of your income will be subject to Singapore tax, unless you’re a company director.
US Expat Tax Treaty
There has yet to be a treaty established between the United States and Singapore. Despite the lack of treaty, each country offers a tax credit designed to eliminate dual taxation. In the US, this is called the foreign tax credit. In Singapore, this is called the unilateral tax credit, which services the same purpose. Both will give credit for taxes paid to a foreign country.
US Expat Taxes for Employees in Singapore:
If you are an employee of a Singapore-based company, your income will be subject to Singapore income tax. Unfortunately, as a US citizen, the income earned in Singapore will also be subject to US expat taxes. The good news is that the US provides a series of exclusions and credits (mentioned above) for income earned and taxes paid in foreign countries. The ultimate goal is balancing your worldwide tax liability.
US Expat Taxes for the Self-Employed in Singapore:
Similar to US requirements, self-employed individuals operating their business in Singapore must pay taxes on their net profits to Singapore. Foreign individuals planning to start a business in Singapore must obtain an EntrePass prior to beginning business. More information on the EntrePass can be obtained from the Singapore Government website. As a US Citizen, the IRS requires that you continue to report and pay tax on your self-employment earnings on your US expat taxes. It does not matter where the income is earned, but you will still qualify to receive the exclusions and credits mentioned above.