US Expats Living in Singapore Must Comply With the IRS Simplified Tax System

Prized for its beauty, culture, and economic growth, Singapore is home to many American expats. Yet, the US and Singapore have a complicated relationship when it comes to taxes. Despite the fact that neither country has an income tax, US expats living in Singapore must comply with all reporting requirements mandated by the IRS or face potential debilitating civil and criminal penalties. This article simplifies the tax intricacies for US expats living in Singapore, providing insights into the nation’s unique system and strategies for efficient tax management.

What Are the Income Tax Rates in Singapore?

Residents are taxed at progressive rates ranging from 0% to 24%, with lower-income earners paying the lowest rates and high-income earners paying the highest. Nonresidents, on the other hand, are taxed at a flat rate of 22%. Nonresidents also are not eligible for the personal reliefs and deductions that residents enjoy.

The country uses a “bona fide residence test” to determine whether an individual qualifies as a resident for tax purposes. To qualify, an expat must live and work in the country for 183 days or more during the calendar year. In addition, the individual must have a valid Employment Pass or Global Investor Program (GIP) pass and a bona fide permanent home in Singapore.

In addition to the above, expats residing Singapore IRS streamlined tax must file Form B1 and submit their estimated chargeable income (ECI) by 15 April each year or the date they receive the Notice of Assessment (NOA), which is typically one month after the filing deadline. ECI includes employment income, investment income, property gains, and other miscellaneous income.

If you are self-employed, you must pay both the employee and employer portion of Social Security (SS) via Schedule SE on your US expat taxes, regardless of where in the world you live and work. Additionally, any accrued CPF growth is taxable in the United States as well as in Singapore, and you must report it on your FBAR (Foreign Bank and Financial Accounts) reporting form, FinCEN Form 114.

Aside from statutory taxes, the country also levies real estate and goods and services taxes (GST). Those who rent property must pay stamp duty on each lease that exceeds $1,000 SGD, which is 0.4% of the property’s total rent for up to four years. The GST is imposed on the purchase price of all imported goods and services, including those that are exempt from the tax. In addition, a 7% value-added tax is charged on all non-residents’ income and a 10% IRA service fee is imposed on those who open an IRA in the country. For more information on these and other governmental taxes in Singapore, visit the government website.