With its vibrant culture and thriving economy, it’s no wonder Singapore is such a popular destination for US expats. And because Singapore is considered a tax haven for corporations, many business owners are drawn to the tiny island nation.
But what are Singapore’s taxes like for US expats? Let’s take a look.
First things first: Do Americans living in Singapore have to file taxes at all?
The short answer is yes. First, virtually all US citizens are required to file a US Federal Tax Return every year, regardless of where they live. On top of this, most expats living in Singapore will need to file and pay taxes to the Government of Singapore as well.
The good news is that Singapore’s tax system is often regarded as one of the most efficient and straightforward in the world. The country operates a territorial tax system, meaning that only income earned within the country is subject to tax.
As an expat, you’ll need to determine your tax residency status in Singapore to know your tax obligations. Suppose you’re a tax resident in Singapore, which means you’ve been in the country for more than 183 days in a year. In that case, you’ll be taxed on all income earned in Singapore and any foreign income remitted to Singapore.
However, if you’re not a tax resident, you’ll only be taxed on the income earned in Singapore. Moreover, Singapore’s tax rates are relatively low compared to other developed countries, with the highest personal income tax rate being 22%.
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Generally, Singapore requires residents to file a personal tax return if their income exceeds 20,000 Singapore dollars (SGD). However, there are no hard and fast rules for tax filing thresholds.
If you are required to file a tax return, Singapore’s Inland Revenue Authority of Singapore (IRAS) will send you a letter, form, or SMS informing you of your obligation. If you are not required to file, the IRAS will send you a notification that you have been selected for No-Filing Service (NFS).
In some cases, the tax obligation for a US citizen living and working in Singapore will depend on whether they’re considered a resident or non-resident.
In Singapore, you are considered a resident if:
If you live in Singapore for an uninterrupted period spanning three calendar years, then you will be considered a resident for the entirety of those three years, even if you only lived there for a portion of one or two of those years.
For example, if you moved to Singapore in August 2021 and remained there until February of 2023, you would be considered a resident for all of 2021, 2022, and 2023.
Finally, US citizens who work in Singapore over at least 183 days spanning two calendar years will be considered residents of Singapore for the entirety of both years, regardless of how much time they spend in Singapore each year.
