David Bell is an America expatriate who has recently been se

David Bell is an America expatriate who has recently been seconded from an American head office to oversee the new marketing division of a newly set-up Singapore subsidiary. David arrived in Singapore on 1 November 2014 and commenced his 15-month employment with the Singapore company from that same date. On a quarterly basis, David\'s monthly salary of $15,000 will be credited directly into David\'s bank account in USA The first payment of $45,000 was made on 1 November 2014. Other expenses paid to David up to 31 December 2014 were as follows: () Travel expense to relocate David and his wife to Singapore $30,000 (i) Premium for 2 months to 31 December 2014 on an accident insurance policy to insure against David\'s work-related injuries. Any payout under the policy will be paid to the Singapore employer as beneficiary, with the amount then disbursed by David as compensation for his injuries . 120 (iü) 3 months rental from 1 November 2014 to 31 January 2015 for an unfurnished apartment with an annual value of $108,000. The apartment was made available to David and his wife as their place of residence in Singapore 27,000 (v) One return air passage for each of David\'s two sons, aged 11 and 14 years, to enable them to spend Christmas with the family in Singapore. Both sons are studying in USA 10,000 Required Advise David of the following: a) his residency status for the relevant years of assessment; and b) his taxable remuneration for the Year of Assessment 2015 from his employment in Singapore, giving reasons for the taxability or otherwise of the various items. \"END OF ASSIGNMENT Page 2 o

Solution

A) David bell is a resident for Assessment year 2015. Residency test is calculated as follows.

If you are not a U.S. citizen, you are considered a \'non-resident for tax purposes\' unless you meet the criteria for one of the following tests:

1: The “Green Card” Test

You are a \'resident for tax purposes\' if you were a legal permanent resident of the United States any time during the past calendar year.

2: The Substantial Presence Test.

You will be considered a \'resident for tax purposes\' if you meet the Substantial Presence Test for the previous calendar year. To meet this test, you must be physically present in the United States for at least:

B) Taxable remuneration of David bell for Assessment year 2015

Salary - 45,000 (Advance salary paid is taxed in the year in which it is paid)

Travel Expense - 30,000 (Work-related travel expenses are deductible, as long as you incurred the costs for a taxi, plane, train or car while working away from home on an assignment that lasts one year or less. Since, here assignment last for more than 1 year, they are taxable)

Insurance Premium - 120 (The IRS treats long-term care insurance as a payment for sickness and injury, so the benefits are taxable.)

Rental Expense - 27,000 (Rental expenses paid by employee is taxable)

One return air passage - 10,000 (Taxable becaue the same is perquisite)

So, his total taxable remuneration = 45,000+30,000+120+27,000+10,000

= $ 112,120

If total equals 183 days or more = Resident for Tax
If total equals 182 days or less = Nonresident for Tax