The Case Study of Di

 Employment Information

Di, 47 years old, is a Singapore citizen. She was employed by a large corporation in Singapore (“S Co”), which is listed on Singapore Exchange since 2010.

In 2018, she accepted a secondment offer to work as Vice President, Marketing Communication, for S Co’s wholly owned subsidiary in Canada (“C Co”) for 3 years with effect from August 1, 2018. Di decided not to extend her overseas secondment and returned to Singapore to continue her employment with S Co in 2021.

Question 1

 Briefly describe Singapore’s income tax system and apply the relevant source rules to explain the taxability of Di’s employment income earned from C Co from the Singapore’s income tax perspective.

Question 2

Apply and explain the tax residency rule for an individual to be defined as a tax resident or non-tax resident in Singapore. Based on this principle, advise Di on her Singapore income tax residency status for the year of assessment 2022 and the basis of the tax position you have taken.

Question 3

Apply the principles of income tax to Di and compute her net taxable employment income for the relevant Year of assessment.

Question 4

Compute the minimum income tax payable by Di for the relevant year of assessment, indicating “S$0” on items which are tax exempt or are not taxable / deductible. For personal reliefs, all relevant reliefs based on information given, should be accounted for in the tax computation and where it is not available/applicable, please insert “S$0”.

Question 5

Based on your answer in Question 3, apply and explain the tax implication of contractual and non-contractual bonuses