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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7432
Experience:  15years with H & R Block. Divisional leader, Instructor
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American Citizen living in Singapore

Resolved Question:

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!

Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D. :

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.

Robin D. :

In the US earned income is just about defined the same way.

Robin D. :

Earned income includes all the taxable income and wages you get from working or from certain disability payments..

Robin D. :

There are two ways to get earned income:



You work for someone who pays you


or


You own or run a business or farm


Robin D. :

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.

Robin D. :

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.

Robin D. :

The Singapore company would need to sponsor you for the VISA.

Robin D. :

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.

Robin D. :

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.

Customer: I have heard from other writers in Singapore that if the company I am working for remotely does not have a Singapore presence that I do not need an additional work permit but I do need to pay tax on the earned income in Singapore. Can you confirm this please? And yes, I know about paying tax in theUS.
Robin D. :

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

Robin D. :

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.

Customer: Ok. Does that include royalties for previously published books?
Robin D. :

Yes it does unfortunately.

Robin D. :

That is because you are in Singapore when you receive the payments

Customer: Ok. That counts against my US tax anyway, right?
Robin D. :

Correct

Robin D. :

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.

Customer: There is no way out of it as a US citizen, I know! I just wanted to confirm again: today at MOM they told me to just write a letter explaining I was a writer for US publishers. Do you know if there will be any other forms to fill out?
Robin D. :

Let me check, I do not think there is any specific form but that could have changed

Customer: Ok. Thanks. I got a little worried!
Robin D. :

No, I could not find a specific form so the advice from MOM would seem correct

Customer: So it just kind of registers with them that that's what I'm doing? Do they tell the tax people? I'm not sure how to classify myself to them.
Customer: Or does MOM send me an "all clear" kind of letter?
Customer: Also, I just wanted to ask. My books are available worldwide via digital and print. But since my contract is with a US publisher, it doesn't matter if they sell the books in SG?
Robin D. :

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?

Customer: I haven't received any tax forms. Just my contract. I'm not considered an employee.
Robin D. :

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.

Robin D. :

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

Customer: I'm sorry. I don't understand. Why did they tell me to write the letter?
Robin D. :

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

Robin D. :

So teh letter would be that action

Robin D. :

the

Robin D. :

sorry

Robin D. :

You may need to register as a business but MOM will send you a confirmation after you write and advis eon your activity

Customer: But I am already contracted. I signed the contract last year when I was living in Hong Kong. But books take about 2 years to be published.
Robin D. :

That does not matter yet

Customer: Can they deny me the right to start a business?
Robin D. :

Write the letter and be specific about the activity (tell them you are considered Self Employed in US)

Robin D. :

They can but they likely will not

Customer: I am just myself. Not an LLC or anything.
Customer: Now I'm really worried.
Robin D. :

I understand that too is why the letter is required and not a certain form

Robin D. :

Singapore does not have a specific form for your type of work

Robin D. :

and

Robin D. :

you are already allowed in because of your pass

Robin D. :

so

Customer: They gave me an email address and I wrote a very simple letter saying that I was a writer published in the US and asking what other information they needed.
Robin D. :

Then you did correctly

Customer: There is a lot of confusing info on expat forums. The woman at mom seemed relaxed but I'm not totally put at ease
Robin D. :

They will most likely require you register as a sole proprietor

Robin D. :

You can do that online

Customer: I'm not taking a job from an SG citizen so is there a reason they wouldn't let me work?
Robin D. :

No

Robin D. :

Forums are fine but they are not the professionals dealing with everything (like the woman at MOM)

Robin D. :

She does this everyday

Customer: I read that the money necessary to set up your own business had gone up significantly. I'm a pretty penniless writer!
Robin D. :

Registration as sole prop is $65

Robin D. :

They may not make you do that

Customer: Yes, that is true. But I've just arrived and am in the middle of contract negotiations in the US so I don't know how that qualifies as they were begun while I was living in Hong Kong. I just got here on Saturday!
Customer: Okay, sole prop is okay. I just read that starting your own business was much more difficult. And costly. Perhaps that is for a different license?
Robin D. :

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

Robin D. :

Yes perhaps that is so, they may not require you to do that but you are self employed.

Customer: Even if the books are already written?
Robin D. :

Yes, the income is not realized before you sell

Robin D. :

The sell is the income

Robin D. :

The sell is when you are in Singapore

Customer: It's kind of a crazy business. The work I am selling now is already done but I may not see any money for 2 years.
Customer: Ok
Robin D. :

That is the nature of writing, unfortunately

Customer: And a DP holder can definitely also be a sole proprietor?
Robin D. :

That is more immigration but like I said, they may not require you register as sole prop.

Customer: Have you had any other clients in this situation?
Robin D. :

NO, not specifically Singagpore, other countries of course.

Customer: So, they may or may not make me register, but I can live in SG and work for US publishers provided I pay SG tax. That is really what matters to me.
Robin D. :

Yes, that is what is really going to matter to them too

Customer: The tax, you mean?
Robin D. :

Yes

Customer: Ok. So basically, they can't prevent me from selling my writing.
Robin D. :

No

Customer: Just to play devil's advocate, how would they ever know?
Robin D. :

In this electronic age transfer of assets, bank accounts, informants.............

Customer: Right. I can on,ynwish I'll ever make enough for it to be worth their while. But as I said, I don't care about paying tax, I just want to be able to write!
Robin D. :

I understand

Customer: So in your opinion, I don't really have anything to worry about?
Robin D. :

I do not think you have anything to worry about, as long as you do what MOM advises and file and pay.

Customer: Ok then. Is there a way to save this conversation and come back to it later? I guess I just have to wait to hear from MOM.
Robin D. :

After you rate you can always come back and view the conversation. It will be saved under your My Questions.

Customer: Ok great. I will try to stop biting my nails. Thanks for your help!
Robin D. :

You are most welcome

Robin D. :

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.

Customer: Bye!
Robin D. :

Best wishes

Customer: Ok thanks!
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7432
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 3 other Tax Specialists are ready to help you

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