There are an estimated 26,000 Americans living in Singapore.
Living in Singapore is a fantastic experience for a variety of reasons – it has a great night life, public transport, schools and healthcare, it's safe and friendly, and the rest of Asia is on your doorstep. As an American expatriate living in Singapore though, what exactly do you need to know regarding filing US expat (and Singaporean) taxes?
The good news is that if you are paying income tax in Singapore, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
US taxes – what you need to know
If you earn more than US$10,000 (or $400 of self-employment income), you are required to file form 1040. While taxes are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further online until October 15th.
“Friendships are forged in a matter of weeks in Singapore but can be relinquished just as quickly. Goodbye parties are popular because departing expats must offload the liquor they can’t take with them.”
- Laura Schwartz, Wall Street Journal.
If you have foreign assets worth more than US$200,000 (per person), excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
If you had a total of more than US$10,000 in one or more foreign accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
The US and Singaporean governments share taxpayer info, while Singaporean banks pass on US account holders' account info to the IRS, so it's not worth not filing or not fully declaring your finances on your return. The penalties for tax evasion for expats are tough to say the least.
If you're a US citizen, green card holder, or US/Singaporean dual citizen, and you have been living in Singapore but you didn't know you had to file a US tax return, don't worry: there's a program called the IRS Streamlined Procedure that allows you to get up to date with your filing without facing any penalties. Don't delay though, as it may not be available if the IRS find you first.
Singaporean tax rates are lower than in the US. Rates for residents range from 0 (up to around US$14,00) to 20% from around US$200,000 (though the highest rate is due to rise to 22%). There is no capital gains or inheritance tax, and you are only taxed on income arising in Singapore, or from abroad if it is paid to you in Singapore.
If you spend less than 183 days a year in Singapore but have income there, you are taxed in a different way, at 15% unless the residents rate would be higher, in which case you pay the higher rate.
The Singaporean 'IRS' is called the IRAS (Inland Revenue Authority of Singapore), and its website has a wealth of information in English.
The income tax return form for residents is form B1, for self-employed people is form B, and for non-residents form M. In all cases returns should be filed by April 15th.
We strongly recommend that if you have any doubts or questions about your tax filing situation as a US expat living in Singapore that you contact a US expat tax specialist.
At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don't hesitate to get in touch and we'll be happy to help.