Have a Tax Question? Ask a Tax Expert
I am an American citizen living in Singapore on a dependent's pass. My husband has a work visa. I would be allowed to take up employment here in Singapore for a Singapore company with a Letter of Consent. However, I am an author of fiction and non-fiction for US companies. I don't know whether income paid to me in the United States by a US company is considered "earned income" or not. I am worried that they will try to prevent me from signing new book contracts in the US but I am not sure if that is even legally possible. Please help!
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.In Singapore Earned Income is for income that individuals receive who are gainfully employed or carrying on a (trade, business, profession or vocation).Money received for writing would certainly be earned income for Singapore purposes.
In the US earned income is just about defined the same way.
Earned income includes all the taxable income and wages you get from working or from certain disability payments..
You work for someone who pays you orYou own or run a business or farm
You work for someone who pays you
You own or run a business or farm
A Dependant’s Pass holder who holds a key appointment in any entity will not be entitled to a Letter of Consent. If they wish to draw a salary in the company, the Dependant’s Pass holder will have to appoint another individual to helm the company instead. Dependant’s Pass holder who are the director and/or shareholder in any Singapore registered company are not allowed to apply for LOC.If you have a company in Singapore that is registered and you are the owner then you would not get the LOC.
Only companies which are incorporated in Singapore can sponsor LOC applications. All Singapore registered companies must have a resident director, to be in compliance with Singapore rules and regulations.
The Singapore company would need to sponsor you for the VISA.
You did not ask but please remember that as a US citizen you are taxed in the US on your worldwide income even if outside the US. You are allowed to take advantage of the Foreign Earned Income Exclusion as long as you meet the requirements but filing a return is still required to report the income unless you earn below the thresh hold for filing.
My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.
That is correct, the work VISA is for individuals that want to work for a Singapore company in Singapore. If you are there 183 days or more you are a tax resident in Singapore and would be taxed on your earnings
You will be taxed on income earned for the period you rendered services in Singapore even if your employer is not a resident in Singapore, or your income is not paid in Singapore.
Yes it does unfortunately.
That is because you are in Singapore when you receive the payments
The roylaties would not be included in your excluded income for US but you could use the Foreign tax credit on the US return for taxes paid in Singapore on the income that is not excluded in US.
Let me check, I do not think there is any specific form but that could have changed
No, I could not find a specific form so the advice from MOM would seem correct
You will certainly need to file and pay the tax in Singapore but as far as MOM informing them for you I am not sure. Your situation is not exactly under the exempt areas but you are not an employee either unless the US companies issue you a W2. Do you get a W2 or are you an independent author?
Then you are going to be filing a Schedule C for US purposes and be considered a business in Singapore as well. That is why they advised you to write a letter. You are already allowed to be in Singapore per your pass you hold as a dependent.
The business portion now is for the taxation, yes MOM should advise that you are in business and you will need to register as such in SIngapore
I would suggest that you not request the starting a business pass though until you write the letter. They said to write because you may not start an activity unless you inform MOM
So teh letter would be that action
You may need to register as a business but MOM will send you a confirmation after you write and advis eon your activity
That does not matter yet
Write the letter and be specific about the activity (tell them you are considered Self Employed in US)
They can but they likely will not
I understand that too is why the letter is required and not a certain form
Singapore does not have a specific form for your type of work
you are already allowed in because of your pass
Then you did correctly
They will most likely require you register as a sole proprietor
You can do that online
Forums are fine but they are not the professionals dealing with everything (like the woman at MOM)
She does this everyday
Registration as sole prop is $65
They may not make you do that
Because you are going to be doing this in Singapore. Under the Business Registration Act, Cap. 32, "business" includes every form of trade, commerce, craftsmanship, calling, profession and any activity carried on for the purposes of gain
Yes perhaps that is so, they may not require you to do that but you are self employed.
Yes, the income is not realized before you sell
The sell is the income
The sell is when you are in Singapore
That is the nature of writing, unfortunately
That is more immigration but like I said, they may not require you register as sole prop.
NO, not specifically Singagpore, other countries of course.
Yes, that is what is really going to matter to them too
In this electronic age transfer of assets, bank accounts, informants.............
I do not think you have anything to worry about, as long as you do what MOM advises and file and pay.
After you rate you can always come back and view the conversation. It will be saved under your My Questions.
You are most welcome
I really enjoyed working with you – please feel free to request me again when you come back to ask another question.You will find the request feature when you come back under your MY QUESTIONS section.