Question

Pls do not handwritten for easy reading
Question:-
Clarence,Christina,Young-soo and Soo Fung are four friends who met in high school in the United States 25 years ago. The four friends stay in touch through social media as they are living and working in different parts of the world after graduating from high school and college in the US. In 2018, the four friends had a reunion in Singapore as all four of them ended up working in Singapore during a similar time period.
A. Clarence Tan, a Singaporean aged 41 years old, returned to Singapore in Sep 2018 to commence employment as the regional marketing director from 1 Oct 2018 with the Singapore subsidiary of MaxSoft Inc, a company tax resident in the US. Under the terms of his employment contract with MaxSoft Singapore Pte Ltd , he is provided with the following benefits/remuneration:
Monthly salary of $50,000
Monthly entertainment allowance of $8,000
a car costing $255,000(including COE) with residual value of $45,000, was made available to Clarence for both business and personal use effective from 1 Oct 2018. All running expenses, including petrol, will be borne by his employer.
Clareence has been working in US since graduating from college in the US. He is married with 2 children, a son 4 years old and a daughter 2 years old. Both children hold Singapore citizenship. He is married to Oliva, a US citizen and who is a housewife. She does not have any income. Clarence owns apartment in Singapore and which he has rented out since 2009. He and his family are currently living in the apartment after the last tenant had moved out. When Clarence was studying and working in US, he would always try to come back to Singapore at least once a year to see his parents.

required:-
a) using the relevant test residence and administrative concession, explain the tax residence status of Clarence for the year of assessment 2019. using the qualitative test, please state at least 3 factors to support your claim.
b) Clarence is required to travel outside of Singapore on business for at least 10 days each month. Determine if Clarence is able to access the Not Ordinarily Resident scheme for YA 2019 and if he will be able to benefit from the NOR scheme in YA 2019. Please explain how Clarence is able to meet the conditions to be satisfied in order to qualify for the scheme as well as to benefit from the scheme.

Answer 1

(a) A person is considered as a tax resident in Singapore if one of the following criteria is met:

• a citizen or a permanent resident residing in Singapore except for temporary absences; or
• a foreigner who has stayed / worked in Singapore (excludes director of a company) for 183 days or more in the year before the year-of-assessment

Since Clareence meets the second condition, he will be considered as resident of Singapore.

(b) Not Ordinarily Resident Scheme

A special scheme called the Not Ordinarily Resident Scheme (NOR) grants favourable tax treatment to qualified individuals for a period of 5 years of assessment. To be eligible for the NOR scheme, the following criteria must be satsfied:

• a non Singapore tax resident (NOR) in the past 3 years of assessment; and
• in that year of assessment in which the individual qualified for the NOR status, he or she must have been a Singapore tax resident

To retain your status as an NOR taxpayer, you are only required to be a tax resident in the first year of assessment. You are not required to be tax resident throughout the five-year qualifying period.

Benefits of the NOR Scheme:

• a NOR taxpayer pays income tax on only that part of his employment income that corresponds with the number of days he spends in Singapore
• a NOR taxpayer gets to enjoy tax exemption on contributions made by the employer to an overseas pension fund which would otherwise be taxable in his hands