US Expat Taxes Explained: Working Overseas Tax for Americans Living in Singapore

Working Overseas Tax Obligations in Singapore

Low crime rates, cleanliness, and global culture make Singapore an attractive destination for expats. How does moving to Singapore affect your US expat taxes? Are you considering joining the group of over 2 million expatriates currently residing in Singapore? This article will help educate you about the tax implications of such a move and the expat tax obligations for Americans living in Singapore.

US Expat Taxes: The Basics

As a US citizen, you are required to report your worldwide income on your US tax return each year, regardless of your residence. The good news is that you are provided with three key opportunities for deductions and credits in an attempt to eliminate dual taxation.

  1. The Foreign Earned Income Exclusion — Qualifying expatriates may elect to exclude up to $105,900 of their foreign earned income on their 2019 US tax return and $107,600 on their 2020 US tax return.
  2. The Foreign Tax Credit— If a US citizen’s residence in another country prompts a tax liability in the foreign country, they will likely be eligible to claim a credit for the foreign income taxes paid on their US tax return.
  3. The Foreign Housing Exclusion — This exclusion allows taxpayers to deduct some housing expenses from their US tax return, in excess of certain country-specific amounts.

The end result is that your US tax liability should be minimal, if not eliminated.

Singapore Income Tax Rates

Comparatively speaking, Singapore has low individual income tax rates. Similar to most other systems, residents are taxed on a progressive basis as follows:

Income (SGD, Singapore DOLLAR) %
20,001-30,000 2
30,001-40,000 3.5
40,001-80,000 7
80,001-120,000 11.5
120,001 -160,000 15
160,001-200,000 18
200,001-240,000 19
240,001-280,000 19.5
280,001-320,000 20
Over 320,001 22

A US expat is considered to be a resident for tax purposes if he or she lived or worked in Singapore for at least 183 days during the calendar year. As a non-resident, your Singapore tax will be calculated at a flat rate of 15% of your employment income or using the progressive rate table shown above, whichever is greater.

Non-employment income is taxed at 22%. Non-employment income only relates to income received from Singaporean sources and does not relate to investment income from outside Singapore such as US managed funds, US rental income, or US bank interest.

Singapore does not assess tax on capital gains or inheritances. However, they do impose a 7% Goods and Services Tax (GST) on all domestic consumption purchases.

Singapore Tax Due Date

If you are considered a resident of Singapore, you are required to file your Singapore tax return via Form B1 by April 15th of each year. This is similar to the payment due date for your US tax return. Self-employed individuals report their earnings via Form B, and non-resident individuals report their earnings via Form M.

Although these tax returns are due on April 15th, the tax payment associated with that return is not due until after the notices are mailed. Notices are usually mailed sometime in September, and you have one month from the date that the assessment is mailed to pay the tax. This is very different from the US tax system, where any and all tax payments are due by April 15th.

If you made less than 22,000 SGD, you are not required to file a Singapore tax return. In addition, many employers in Singapore will submit salary information directly to the Inland Revenue Authority of Singapore (IRAS). In the absence of any other income, this eliminates your filing requirement to the IRAS.

Social Security Impact on Your US Expat Taxes

In Singapore, the equivalent of Social Security is called the Central Provident Fund (CPF). As an expatriate, you are not required to make payments into the Singapore CPF unless you are approved for permanent residency status by the Immigration and Checkpoint Authority of Singapore. If you decide to become a permanent resident of Singapore, you and your employer will both make contributions into the CPF. The total contribution on your behalf into CPF will total 37% of your annual salary, with 17% coming from your employer and the remainder coming from you.

If you are a US citizen and self-employed in Singapore, you are still required to pay US Social Security and Medicare taxes on your earnings, even when contributions to CPF are required. This is because the US and Singapore do not currently have an agreement eliminating the double taxation of social security income. You will pay both the employee and employer portion via Schedule SE on your US tax return. However, if you are an employee of a non-US employer and required to pay taxes into the foreign country’s social security equivalent, you may not be required to pay US Social Security tax.

US-Singapore Tax Treaty

Currently, there is no double tax agreement between the United States and Singapore. As such, income subject to tax in both jurisdictions may be double taxed (e.g. salary earned in Singapore by a US Citizen). Despite the lack of treaty, mechanisms such as the foreign earned income exclusion, foreign housing exclusion and foreign tax credits can be implemented to reduce and/or eliminate this double taxation.

US Expat Taxes for the Self-Employed in Singapore

Similar to US requirements, self-employed individuals operating businesses in Singapore must pay taxes on their net profits to Singapore. Foreign individuals planning to start a business in Singapore must obtain an EntrePass prior to beginning business. As a US citizen, the IRS requires that you continue to report and pay US tax on your self-employment earnings on your US tax return. It does not matter where the income is earned – you will still qualify to receive the exclusions and credits mentioned above. Check out our tax guide for expat business owners and entrepreneurs to learn more about specific tax information for self-employed expats.

Need More Information About Working Overseas Tax in Singapore?

Our team of expat-expert CPAs and IRS Enrolled Agents are here to help you understand your working overseas tax obligations while living abroad and make filing US expat taxes a more hassle-free process. Contact us today!

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