Singapore Income Tax Tips & Tricks 2

Query: When expats leave Singapore, does anybody know how many days in advance one should notify the immigration office? Should the tax authority be notified too? I heard that they would not allow you to exit unless you show some proof that you have paid all of your taxes.

Tip #1: There is an obligation on your employer to file a notice advising the taxation office of the cessation of your employment. Your employer in effect guaranteed your tax liablities when they sponsored your employment so they will be left with the bag, so to speak, if you were to do a "runner". I think they may even be required to withhold your last month salary until given evidence of tax clearance (which you can arrange to be paid out of what they withhold).

Tax clearance and cancellation of your work permit will follow. The people to see are the adminstration/human resource officers at your place of employment. If your employer does not have anyone experienced in this I would suggest you go in person to the Inland Revenue Department and get them to explain the system for you. They are generally most helpful, and have the ability to process matters very quickly. Another alternative is to speak with your taxation advisor/accountant if you have one.

As an aside, it is not unusual to receive, as much as a year after you have left, a cheque from the Singapore IRD for a refund of tax paid which turns out to be too much. (Tax clearance may involve assessment according to rules/rates which are altered in the following year's Budget).

The preparation of a tax return is always primarily the individual's responsibility. Of course the HR dept should have most of the relevant information to cover income from that source. Even if you engage a professional to prepare a return it will still only be correct in so far as they are fully informed and you check all the details. There are many instances in which returns have been submitted on an incorrect basis for years culminating in a hefty adjustment when the IRD discovers the "error".
Contributed by Buffy

Tip #2: If you are a foreigner leaving Singapore, your HR Department is responsible for helping you to prepare your tax return. Your HR Manager will inform the Inland Revenue Department that you have resigned from your job and that you will be leaving Singapore. He/she will usually handle all of the paperwork for you and withhold your last month's salary for tax purposes. If your final month's salary does not cover your tax completely, you will be required to pay the difference. If your final month's salary is more than enough to cover your tax, you will receive a refund cheque. Some multinational companies in Singapore hire tax consultants from one of the Chartered Accounting firms eg. Price Waterhouse and ask them to provide tax advice and assistance to all of their "expat" staff. This kind of tax preparation assistance is usually only provided to employees who have been employed on "full expat terms" or as "international assignees" ie. they are not hired on local terms.
Contributed by Alison