No US/Singapore Tax Treaty: What That Means for Expats

Written by Mike Wallace

MBA

Reviewed by Allen Pfeister

MBA, CPA

Mike Wallace

MBA

Mike Wallace, CEO at Greenback Expat Tax Services, has extensive experience in finance, operations, and strategic leadership. Mike has worked in numerous C-Level roles, including at large financial institutions. Mike holds a Master's in Business Administration (MBA) from the University of Chicago's Booth School of Business.

Allen Pfeister

MBA, CPA

Allen Pfeister is a Partner at Tax Uncomplicated, collaborating with Greenback Expat Tax Services and Klemsen Consulting. Allen holds an MBA from the University of New Orleans and a BS in Accounting and Finance from Louisiana State University.

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Updated on September 24, 2024

5 minute read

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Wallace, M. (2024, September 24). No US/Singapore Tax Treaty: What That Means for Expats. GreenbackTaxServices.com. Retrieved , from https://www.greenbacktaxservices.com/blog/tax-treaty-between-us-singapore/

Given Singapore’s global culture and excellent job prospects, it’s no wonder people pursue career opportunities there. But since there is no Singapore/US tax treaty, expats considering moving there are at risk of double taxation. Luckily, the IRS has rules to reduce much of this burden, whether or not we have an agreement with them. 

Key Implications

The US follows a worldwide income tax model, meaning that no matter where they live, income is taxable in the US. In other words, since there is no tax treaty between Singapore and the US, income may be taxed in both countries. 

There is no “totalization” agreement between the US and Singapore. These global contracts are meant to prevent double taxation of US Social Security, Medicare, and their foreign equivalents. Since such an agreement is not in place, if you’re self-employed or working for a US company, you’ll have to pay into Singapore’s version of social security, the Central Provident Fund (CPF), as well as US social security. 

Additionally, if you’re employed by a Singaporean company contributing to the Central Provident Fund (CPF), those contributions are also taxable in the US. This differs from domestic US employees, where 401(k) contributions aren’t taxed until funds are distributed. This is not true of money contributed to the CPF. 

Moreover, growth within the CPF, as well as distributions, are taxable in the US.

Important

Tax treaties between the US and other countries, while often seen as beneficial, generally do not help US citizens living abroad. The “Saver’s Clause” in US tax treaties limits the applicability of these agreements for US expats, as it ensures that the US still retains the right to tax its citizens no matter where they reside. Therefore, such treaties are more useful for non-US citizens living in the US. US expats typically benefit more from provisions like the Foreign Earned Income Exclusion (FEIE), Foreign Tax Credit (FTC), and Foreign Housing Exclusion to reduce their tax liability.

Singapore Residency Rules: How Are Foreigners Taxed?

Generally, Singapore taxes income earned while you are living there, even if the US or another foreign company employs you.

You’re considered a tax resident of Singapore if, during the calendar year, you were physically present for 183 days or more. This also counts if you straddle two calendar years and the total duration of stay was at least 183 days.

You’re considered a non-resident if you were there for less than 183 days. In this case, you’ll be taxed on income earned while you were there at either a flat rate of 15% or the progressive resident tax rate, whichever is higher. See here for detailed Singaporean tax brackets and rules.

With few exceptions, Singapore does not tax foreign-source income, even if it is deposited into a local bank account. 

How to Reduce Income Tax in Singapore

The US and Singapore may not have a tax treaty in place, but there’s good news: US tax credits and exemptions may help you avoid much of this added tax burden.

Assuming you qualify: 

• The Foreign Earned Income Exclusion (FEIE) allows you to exclude up to $126,500 of foreign-earned income from their US taxes in 2024.
  
• The Foreign Tax Credit (FTC) allows you to credit foreign taxes paid directly against your US tax burden, up to a formulaically applied limit.
  
• The Foreign Housing Exclusion may allow you to exclude additional income from being taxed for rent and other housing costs. 

There are tradeoffs to consider when taking any of the above credits or deductions. Read our linked in-depth guides for further information.  

Filing Requirements and Compliance 

The primary individual income tax filing form for Singapore residents is Form B1. You can check if you need to file here and file electronically here. The Singapore tax year is January 1 through December 31. The paper filing deadline is April 15, and the e-filing deadline is April 18. 

Generally, Singapore will notify you directly if you need to file taxes, but it’s best to check yourself just to be sure. 

If your income exceeds the following thresholds, you must file US taxes. They’re due April 15^th if you live in the US or Puerto Rico, or by June 15^th if you live outside the US and Puerto Rico. It’s possible to file an extension until October 15^th. In very limited circumstances, expats can ask if the IRS will extend their return until December 15^th. While extensions are available, they only extend the time to file, not when taxes are due. 

• Use Form 1040 for individual income tax.
  
• Use Form 1116 to apply for the Foreign Tax Credit.
  
• Use Form 2555 to apply for the Foreign Earned Income Exclusion or Foreign Housing Exclusion.
  
• You must file a Foreign Bank and Financial Accounts Report (FBAR) if you have over $10,000 in a foreign bank account.
  
• If you own more than a certain amount of foreign assets, you must file a FACTA report using Form 8938. Thresholds differ based on filing status.

Expat Tax Experts Can Save You Money – Even Without a US/Singapore Tax Treaty

Doing your expat taxes isn’t easy, but Greenback certainly makes it easier. Clients appreciate our smooth onboarding process, as well as their personalized, one-on-one interactions with their dedicated accountants.

Have questions about the process or next steps? Contact us, and one of our Customer Champions will happily address all your concerns.