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 Tax Implications, Working in MY, paid in SG

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TSchrislilley P
post Dec 5 2019, 08:37 PM, updated 5y ago

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Hi all,

Just wanting to pick your brains about my situation and how to deal with the taxation. I’ve recently landed a job for a multinational company based in Canada, who has a head office in Singapore as the Asia Pacific subsidiary. Due to the fact that they don’t have a Malaysian office and don’t want the hassle of setting up a Malaysian entity to deal with just 1 staff member, I’m contracted to them as a “contractor”, therefore, I am personally responsible for all tax and retirement fund payments. I am a Malaysian citizen. And the company has chosen to engage me in Malaysia, so I’ll be working mostly out of Malaysia, with regular trips to Singapore to meet with the team and client meetings all over SEA. For all intent and purposes, i’ll be a Malaysian resident for the year

The thing is, I requested my wage to be paid in SGD and my current plan is to open a Singapore bank account to keep my money there, only taking out what i need to live in Malaysia.

Since I’m choosing to be paid into Singapore and holding my money in Singapore, will the tax office there come after me? What do I have to do to ensure I’m not going to be double taxed?
James1983
post Dec 6 2019, 07:55 AM

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You might want to ask in the singapore thread here

https://forum.lowyat.net/topic/4211035/+7040

Will get better response
doublecool
post Dec 6 2019, 12:05 PM

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from tax perspective, it depends on whether you are a tax resident for either singapore/malaysia

the general rule of thumb is:
You will be regarded as a tax resident if you stay or work in Singapore for at least 183 days in a calendar year.

so if you stay in malaysia >183 days u will be considered tax resident for malaysia

but even if you are a non tax resident for singapore:
As a non-resident:

You will only be taxed on all income earned in Singapore.
You will not be entitled to tax reliefs.
Your employment income will be taxed at a flat rate of 15% or the progressive resident rates, whichever results in a higher tax amount.
Director's fees and other income such as rent earned in or derived from Singapore will be taxed at the prevailing rate of 22%

tldr; get a tax consultant and most prob you will need to file both income tax return for malaysia and singapore.
fooym
post Dec 6 2019, 12:31 PM

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QUOTE(chrislilley @ Dec 5 2019, 08:37 PM)
Hi all,

Just wanting to pick your brains about my situation and how to deal with the taxation. I’ve recently landed a job for a multinational company based in Canada, who has a head office in Singapore as the Asia Pacific subsidiary. Due to the fact that they don’t have a Malaysian office and don’t want the hassle of setting up a Malaysian entity to deal with just 1 staff member, I’m contracted to them as a “contractor”, therefore, I am personally responsible for all tax and retirement fund payments. I am a Malaysian citizen. And the company has chosen to engage me in Malaysia, so I’ll be working mostly out of Malaysia, with regular trips to Singapore to meet with the team and client meetings all over SEA. For all intent and purposes, i’ll be a Malaysian resident for the year

The thing is, I requested my wage to be paid in SGD and my current plan is to open a Singapore bank account to keep my money there, only taking out what i need to live in Malaysia.

Since I’m choosing to be paid into Singapore and holding my money in Singapore, will the tax office there come after me? What do I have to do to ensure I’m not going to be double taxed?
*
Hi, wanted to give some insights. Singapore and Malaysia adopts territorial basis of taxation, which taxes income on sources. For your case, ie employment income, source is determined based on where you exercise your employment. Do not get confused with tax residency, it merely determine the tax rates on your employment income sources in one jurisdiction.

In your case, I suggest you to check who you sign your employment contract with. If you sign with Canada it will be more complicated because if not mistaken Canada is on worldwide scope of taxation.if you sign with SG but you spend most of your time in MY, chances are you will be subject to MY tax.

But the whole arrangement is not tax efficiency. From a corporate perspective, SG basically creates a PE in MY due to your presence there. And also who will issue a Form EA for you to report to IRB.

Lastly, who pay you, in what currency and into which bank are not the determining factor in concluding where you should pay your personal tax.

Better check with your company.

Cheers!



wayton
post Dec 6 2019, 01:43 PM

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You need a proper tax consultation firm for advice.
If you file as employed, you may have trouble to have an EA to show your employment income.
If contractual then you need to have a proper contract to show your income.

If you are base in Malaysia and tax residence then you need to file in Malaysia.
Whether your income is paid in Sgd or Myr or paid in Sg bank, it doesn't affect where you should file the tax.
Tax is based on tax residence and where it is derived.
Derived is not meant who paid you or being paid at sg or MY.
Derive means where you are base and work from that generate the income.

Please consult registered tax consultancy firm as you need to have proper and correct way to declare the income that you need to prepare and have certain documentation from your company for the declaration.

 

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