You will write a note setting out how each foreign income source is treated and what to do if you move.
By the end of module 6, Shu Ting's notes on foreign income were spread across her tax workbook, an email to HR about the Jakarta posting, and a list of questions for the tax adviser. She wanted them on one page that she could hand to the adviser, reread before filing, and update if the posting went ahead.
This exercise builds that page: a short note setting out each foreign income source, how Singapore treats it, any foreign tax paid, and what you'd do if you moved. It takes about twenty minutes. You'll need statements for any overseas accounts, your brokerage dividend records, and the IRAS pages from lessons 6.1 to 6.3.
Start a new tab or document and give each foreign source its own entry. For each one, write four things: the country, the type of income, the amount for last year in Singapore dollars, and how the money reaches you.
"How it reaches you" matters more than it seems. Income paid into an overseas account and left there, income transferred to Singapore, and income received through a partnership or a company can all be treated differently. Write down the actual route.
If you have no foreign income at all, your list can be one line saying so. That still counts, and it means steps 2 and 3 are quick.
Under each source, write how Singapore treats it and the rule behind your conclusion, using lesson 6.1, Foreign income received in Singapore. Most investment income received by an individual from abroad will be exempt as foreign-sourced income. Be careful with anything that comes from work you do in Singapore for an overseas client, which is usually Singapore-sourced, and with anything that comes through a partnership.
Then write any foreign tax paid on it: the amount, and the document that shows it, such as a dividend statement showing withholding or a foreign tax assessment. If Singapore exempts the income, that foreign tax is a cost and can't be credited, as lesson 6.3, Double taxation agreements and foreign tax credits, explained. Write that down too, so you don't go looking for a credit later.
Even if you have no plans to move, write a short section on what would happen if you did. If you have plans, make this section detailed. Use the questions from lesson 6.2, Working overseas and moving away:
your Singapore residency in the year you leave and the years you're away whether tax clearance applies, and what your employer would hold back how the new country would tax your salary and your other income whether a tax treaty applies, and what it says about your main income what happens to your CPF, your SRS account and any Singapore rental income
For every conclusion, write the IRAS page or treaty article you relied on, with the date you read it. Rules change, and a note without sources goes stale without telling you.
Here is hers, with example figures.
Australia, interest on a savings account, S$300 for the year, left in the Australian account. Singapore treatment: exempt, foreign-sourced income received by an individual. Foreign tax: Australian withholding on interest paid to a non-resident, shown on her bank's annual statement, a cost with no Singapore credit. Source: IRAS page on foreign-sourced income for individuals, checked in March.
United States, dividends on a US-listed fund, S$600 received after withholding, paid into her brokerage account. Singapore treatment: exempt, foreign-sourced. Foreign tax: US withholding shown on her broker's dividend statements, a final cost. Singapore has no general income tax treaty with the US. Source: same IRAS page.
Indonesia, the possible posting. Singapore residency during the posting: to be confirmed. Tax clearance: not needed, as she's a citizen. Salary during the posting: likely taxed in Indonesia, generally not in Singapore if the job is carried out wholly there. Treaty: yes, Singapore and Indonesia have one, employment article read. CPF: no contributions while employed overseas by the Indonesian entity, to be confirmed with HR. SRS: no contributions planned during the posting. Rental income from the room in Bukit Batok: still Singapore-sourced, still taxable here, and Marcus would keep declaring his half.
At the bottom she wrote her question for the adviser: "During a two-year posting with my husband and daughter staying in Singapore, which country treats me as resident under the treaty, and does that change how my share of the rent is taxed?"
Now write your own note for the activity, and end it with one question to take to IRAS or a tax adviser.
Write the note for your situation and list one question to take to IRAS or a tax adviser.
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