Taxes are never fun, but they're especially daunting when you're an expat dealing with a foreign system. Whether you've been in the country for years or are just moving in, it's important to know the basics of the tax system.
Below we've outlined 5 key things you need to know about expat taxes in your new home country. So whether you're looking to get your finances in order or just trying to better understand the process, read on for helpful tips and information!
1. What Taxes Do Expats Need to Pay?
As an expat, there are certain taxes that you need to be aware of and pay. Here are the five most important ones:
- Income Tax: This is a tax that you need to pay on your income, no matter where it is earned. The amount you pay will depend on your tax residency status and how much money you make.
- Property Tax: If you own property, you will need to pay property tax. The amount you pay will depend on the value of your property and the type of property it is.
- Goods and Services Tax (GST): This is a tax on most goods and services in Singapore. The rate is 7%, and it is usually included in the price of the item.
- Employer's Central Provident Fund (CPF) Contributions: If you are employed in Singapore, your employer will need to contribute to your CPF account. The amount they contribute will depend on your salary and age.
- Employee's Central Provident Fund (CPF) Contributions: You will also need to contribute to your own CPF account, depending on your salary and age.
2. How Does Filing Taxes as an Expat Differ From Filing in Your Home Country?
As an expat, it's important to stay on top of your taxes and understand how they differ from filing in your home country. Here are 5 key things you need to know:
- You are still responsible for filing taxes in your home country, even if you are living abroad.
- You are allowed to claim a foreign income exemption, which reduces the amount of tax you have to pay on income earned outside of the U.S.
- You may be able to claim a foreign tax credit, which allows you to offset any taxes you have paid in your host country against the taxes you owe in the U.S.
- You may be able to file a joint return with your spouse, even if he or she is not a U.S. citizen or resident.
- The deadline for filing taxes as an expat is typically June 15th, but you can request an extension if necessary
3. How to Get Help With Filing Taxes as an Expat
If you're an expat and you're feeling overwhelmed by the prospect of filing taxes in a new country, don't worry! You're not alone and there is help available.
The first step is to find a good tax accountant who specializes in helping expats file taxes. They will be able to help you figure out what you need to do to file correctly and they can also offer advice on things like claiming tax reliefs and exemptions.
Another option is to use an online tax filing service. These services are designed specifically for expats and they can make the filing process much easier. They will guide you through every step of the process and they will also help you claim any available tax reliefs and exemptions.
Whichever option you choose, don't be afraid to ask for help.
4. What Deductions Can Expats Claim?
Expats can claim certain deductions on their taxes, similar to those available to non-expats. If you own and use a car for your job, you may be able to deduct some of the costs. You can also claim moving expenses if you had to move to your current location for work.
If you have certain expenses related to earning income, such as work-related phone bills, you may also be able to deduct them. You may even be eligible for deductions related to studying or teaching English abroad. Additionally, expats will want to take note of any international tax treaty benefits that may apply in their case; these could result in tax savings as well.
Don't forget that expats who are claiming deductions must keep thorough records of all their expenses, receipts and other supporting documents, in case the tax authorities should ask for them.
5. Can Expats Qualify for Tax Exemptions or Credits?
The final thing to keep in mind when it comes to taxes for expats is the fact that there are likely exemptions or tax credits available. Depending on the country you are residing in, you may be able to take advantage of these tax breaks. For example, if you are employed by a foreign government or international organization, you may qualify for certain tax exemptions or credits.
It's a good idea to check with your country's local tax regulations to see if there are any relevant exemptions available that could help reduce your overall tax bill. It's always best to consider all your options before filing taxes as an expat since there may be other ways for you to save money on taxes due.
So there you have it — five essential things every expat needs to know about taxes. Additionally, you’ll want to keep up to date with tax deadlines for expats, as they can differ from standard filings.
Hopefully, this information has been helpful and has cleared up any questions you may have had. Remember, it's always best to consult a tax professional if you're uncertain about anything, so don't hesitate to reach out for assistance if needed.