Financial meteor
As a follow-up to the financial salvos I've been hit by, the Singapore Inland Revenue recently reviewed the taxes I paid for the years 2011-2014. After receiving my response to their queries, they designated me as "non-resident" for tax purpose because I hadn't resided or worked in Singapore for more than 183 days in each of those years.
What's the impact? Monstrously huge!
Consider the following income tax rates for the year 2016 i.e. Year of Assessment 2017 (sourced from IRAS's website)
A resident pays no tax on the first $20k net income (after relevant deductions) and then 2% on the next $10k. So based on, say, a net income of $25k, the amount of tax is 2%*5k = $100.
A non-resident pays a flat tax rate of 22%. So, the amount of tax on the same net income as above is 22%*25k = $5,500.
Now, multiply that by 4 years due to the retrospective assessments.
I had always thought PR pays the resident tax rate and IRAS's previous 4 years assessment had always been consistent with this notion. It wouldn't be a problem if I had known this at the start and paid non-resident taxes as and when it was due each year. The major problem now is paying this huge amount of additional tax, accumulated over 4 years!
I tried appealing for a discount, citing the above fact and assertion as well as that I, together with my siblings, are responsible fully for my aging parents cost of living. Nope, they didn't budge, despite the great burden and inconvenience they had caused due to their oversight all these years.
Instead, they suggested a monthly installment over 3 months. Goodness. I appealed for installment of equal amount over 12 months, which they agreed and added that they are allowing this 9-month extension without the 5% late payment penalty.
Although I'm grateful they acceded to my second proposal, I still feel a little aggrieved over this whole episode, which, as I said before, is entirely avoidable. Haiz
What's the impact? Monstrously huge!
Consider the following income tax rates for the year 2016 i.e. Year of Assessment 2017 (sourced from IRAS's website)
A resident pays no tax on the first $20k net income (after relevant deductions) and then 2% on the next $10k. So based on, say, a net income of $25k, the amount of tax is 2%*5k = $100.
A non-resident pays a flat tax rate of 22%. So, the amount of tax on the same net income as above is 22%*25k = $5,500.
Now, multiply that by 4 years due to the retrospective assessments.
I had always thought PR pays the resident tax rate and IRAS's previous 4 years assessment had always been consistent with this notion. It wouldn't be a problem if I had known this at the start and paid non-resident taxes as and when it was due each year. The major problem now is paying this huge amount of additional tax, accumulated over 4 years!
I tried appealing for a discount, citing the above fact and assertion as well as that I, together with my siblings, are responsible fully for my aging parents cost of living. Nope, they didn't budge, despite the great burden and inconvenience they had caused due to their oversight all these years.
Instead, they suggested a monthly installment over 3 months. Goodness. I appealed for installment of equal amount over 12 months, which they agreed and added that they are allowing this 9-month extension without the 5% late payment penalty.
Although I'm grateful they acceded to my second proposal, I still feel a little aggrieved over this whole episode, which, as I said before, is entirely avoidable. Haiz
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