Singapore Day Trader Tax with Oversees Brokers

heispark

heispark

I heard if I live in Singapore (I am not U.S citizen) and classified as a day trader, when I use Oversees Brokers such as TD Ameritrade USA (for U.S Futures) or Dukascopy Switzerland (for Forex), I don't need to pay any tax (no income tax, no capital gain tax, etc.). Is this still be true? Can anyone confirm this?

https://www.daytrading.com/taxes/singapore

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What If You Use An Overseas Broker?
Despite the growing number of brokerages in Singapore, many still look abroad for high-quality platforms and low costs. How will the IRAS view your taxes on day trading profits and losses then?

From the IRAS and MOF (Ministry of Finance), it would appear that overseas income received in Singapore on or after the 1st of January 2004 is not taxable, excluding certain situations. For further clarification, see the ‘Overseas Income Received in Singapore’ on the IRAS website.
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I am planning to move either to the U.S. (Hawaii specifically) or Singapore in the foreseeable future. U.S. taxes on U.S. Futures trading as a day trader is O.K. but Singapore's superb!! :rolleyes:
 
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The information on daytrading.com has not been updated.
On IRAS website, it was indeeed mentioned about volume, frequency of trade... to determine if it’s taxable or not. But they took it off few years ago and all trades became non-taxable.
HOWEVER, you won’t get Singapore visa, bank loan and credit card if you don’t pay taxes.
Best is to create a company and give yourself a salary.
If your annual salary is 120k, you’ll pay less than 8k in taxes. That’s only 6.5%.
And it doesn’t take into account all the tax rebates they like to give...
 
heispark said:
I heard if I live in Singapore (I am not U.S citizen) and classified as a day trader, when I use Oversees Brokers such as TD Ameritrade USA (for U.S Futures) or Dukascopy Switzerland (for Forex), I don't need to pay any tax (no income tax, no capital gain tax, etc.). Is this still be true? Can anyone confirm this?

https://www.daytrading.com/taxes/singapore

---------------------------------------------------------------
What If You Use An Overseas Broker?
Despite the growing number of brokerages in Singapore, many still look abroad for high-quality platforms and low costs. How will the IRAS view your taxes on day trading profits and losses then?

From the IRAS and MOF (Ministry of Finance), it would appear that overseas income received in Singapore on or after the 1st of January 2004 is not taxable, excluding certain situations. For further clarification, see the ‘Overseas Income Received in Singapore’ on the IRAS website.
---------------------------------------------------------------

I am planning to move either to the U.S. (Hawaii specifically) or Singapore in the foreseeable future. U.S. taxes on U.S. Futures trading as a day trader is O.K. but Singapore's superb!! :rolleyes:
More...
We withhold 30% of interest and dividends paid. That is it.
 
GregorySG9 said:
The information on daytrading.com has not been updated.
On IRAS website, it was indeeed mentioned about volume, frequency of trade... to determine if it’s taxable or not. But they took it off few years ago and all trades became non-taxable.
HOWEVER, you won’t get Singapore visa, bank loan and credit card if you don’t pay taxes.
Best is to create a company and give yourself a salary.
If your annual salary is 120k, you’ll pay less than 8k in taxes. That’s only 6.5%.
And it doesn’t take into account all the tax rebates they like to give...
More...
Thank you for the information. For example, you made $1M / year trading U.S. Futures using a oversees broker. You created a paper company in Singapore and gave you annual salary $50K. Then is remaining $950K tax free? I guess IRAS is not a fool......
 
You pay income tax on the 50k salary.
You pay also corporate tax on your company's profit. 8.5% on the first 300k, and 17% on the following 650k.
No tax on the dividends so you can get your company's profit: 950k- corporate tax.

But this is not optimised. You should raise your salary until your marginal income tax rate is close to your marginal corporate tax rate: 17% for your example. Also it's easier to get visa if you have higher salary.

If your idea is to declare only 50k under a company just to get visa, and benefit from the no capital gain tax on the 950k, it may work but you will have problems with the visa. 50k salary is too low.

Singapore has already very low taxes. Trying to pay even less taxes as a foreigner is to me counter-productive. They want foreigners to contribute. If you do, you can become PR with all the benefits. If you don't contribute enough, you don't get visa.
If you bring back 1million in profit yearly and pay Sg taxes on it, they will probably welcome you and you will still save a lot of money in taxes compared to the US.
 
GregorySG9 said:
You pay income tax on the 50k salary.
You pay also corporate tax on your company's profit. 8.5% on the first 300k, and 17% on the following 650k.
No tax on the dividends so you can get your company's profit: 950k- corporate tax.

But this is not optimised. You should raise your salary until your marginal income tax rate is close to your marginal corporate tax rate: 17% for your example. Also it's easier to get visa if you have higher salary.

If your idea is to declare only 50k under a company just to get visa, and benefit from the no capital gain tax on the 950k, it may work but you will have problems with the visa. 50k salary is too low.

Singapore has already very low taxes. Trying to pay even less taxes as a foreigner is to me counter-productive. They want foreigners to contribute. If you do, you can become PR with all the benefits. If you don't contribute enough, you don't get visa.
If you bring back 1million in profit yearly and pay Sg taxes on it, they will probably welcome you and you will still save a lot of money in taxes compared to the US.
More...
Thank you very much for the details. Well, considering all the details, I think living in the U.S. as a full time Futures trader doesn't look that bad as 60/40 rule applies to Futures trading..... :rolleyes:
https://optimusfutures.com/tradeblog/archives/tax-advantages-of-trading-futures-vs-stocks
 
By the way, S.Korea charges 11% of capital gain tax to the gains of CME Futures and Options trading (no income tax). Forex and domestic stocks (except dividend) are tax free. All the funds trading in the Exchange are guaranteed by government (If you your broker goes bankruptcy, the government pays it back to you). S.Korea makes Singapore shy........ :D
Drawbacks are Korean citizens should use only Korea based brokers. These brokers charge very high commission ($7.5 ~ $10 + Exchange + NFA). $7.5 commission must be a joke. They should make you feel TDA's $2.25 commission is dirty cheap.
 
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GregorySG9 said:
You pay income tax on the 50k salary.
You pay also corporate tax on your company's profit. 8.5% on the first 300k, and 17% on the following 650k.
No tax on the dividends so you can get your company's profit: 950k- corporate tax.

But this is not optimised. You should raise your salary until your marginal income tax rate is close to your marginal corporate tax rate: 17% for your example. Also it's easier to get visa if you have higher salary.

If your idea is to declare only 50k under a company just to get visa, and benefit from the no capital gain tax on the 950k, it may work but you will have problems with the visa. 50k salary is too low.

Singapore has already very low taxes. Trying to pay even less taxes as a foreigner is to me counter-productive. They want foreigners to contribute. If you do, you can become PR with all the benefits. If you don't contribute enough, you don't get visa.
If you bring back 1million in profit yearly and pay Sg taxes on it, they will probably welcome you and you will still save a lot of money in taxes compared to the US.
More...

Hello Gregory, I really appreciate your insightful and informative sharing. I understand the concept of paying yourself a consistent income through a company, but I'm curious about how you report the company's profit or loss and where its income originates from if it's not through trading.
 
I'm a Singaporean. Zero capital gains tax over here. 30% withholding tax on dividends from U.S stocks. This withholding tax is imposed by the U.S. government. Zero tax on dividends(local and foreign stocks) from the Singapore government.

Singapore is a paradise for capitalists.
 
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