Is Singapore CPF Taxed in U.S. : FBAR & FATCA

The Singapore CPF is one of the more complicated international Pension/Social Security schemes that US persons with CPF have to deal with from a US tax and reporting standpoint. That is because there is no tax treaty between the United States and Singapore, and the IRS has already issued memoranda in previous years explaining their position (which is in direct contrast to how the CPF would work in Singapore). Let's review the basics of the Singapore CPF, US Tax and Reporting.

WHAT IS A SINGAPORE CPF?
The Singapore CPF is a type of pension fund established in Singapore. It is similar to a 401K in the United states but also takes on characteristics of Social Security - although It is much more similarly resembles pension. Each individual has their own identification number which is made up of different types of accounts. Unlike Social Security in the United States, there is a set balance depending on how much has been contributed and under certain circumstances the full amount of the CPF can be withdrawn. But, unlike the 401K, the CPF is mandatory under certain situations such as working for a Singaporean employer -- unless an exception or exclusion applies.

The summaries below are based on how the IRS has ruled in the past. Some taxpayers may take a different position -- noting, that there is no tax treaty between the US and Singapore.

CPF CONTRIBUTIONS BY A US PERSON
If a US person is working for a Singaporean employer and that Singaporean employer is making contributions to the CPF, then those contributions are not deducted from the US persons income -- unlike a 401K, which is deducted pre-tax. In other words, the value of the CPF contribution is grossed up and included in the total US income for the Taxpayer. Since there is no U.S. tax treaty with Singapore, there is no rule that would otherwise eliminate the contribution made on behalf of the employee from U.S. tax. Likewise, there is no Totalization Agreement regarding Social Security benefits either.

GROWTH WITHIN A SINGAPORE CPF
The growth within the CPF is also taxable. That is because there is no tax treaty or other agreement in place that holds otherwise. Just because the CPF may enjoy tax deferred treatment overseas, does not translate to tax deferred treatment under the US tax code. The reason why most pensions are not taxed during the growth phase is because the tax deferral treatment is based on treaty law between the United States and the specific country.

CPF DISTRIBUTIONS
Distributions from the CPF are taxable, but if the growth has already been taxed, then the person is not double taxed on the same income. If the US person has paid all tax on the growth within the fund based on their tax basis when becoming a US Person, then their tax basis would equal the fund value -- and distributions would not be taxable since the tax was already paid during the growth phase.

FBAR & FATCA Form 8938 SINGAPORE CPF REPORTING
The Singapore CPF Is reported for both FBAR and FATCA Form 8938. The CPF would be considered a foreign financial account ( FBAR) and a Specified Foreign Financial Asset (Form 8938) -- and therefore should be included on both forms.

SINGAPORE CPF TAXATION AND REPORTING IS COMPLEX
In conclusion, U.S. citizens have significant tax and reporting requirements to the US for a Singaporean CPF. Generally, US Person must include their worldwide income on their tax return, along with reporting their global assets to the IRS and FinCEN.

IRS OFFSHORE DISCLOSURE & COMPLIANCE
If you are out of compliance, you should speak with an experienced Attorney before making any affirmative representations or statements to the IRS.

SPEAK WITH AN EXPERIENCED SPECIALIST
IRS Offshore Compliance law is a specialty are of tax. It is important that you speak with an experienced State Bar Board Certified Tax Law Specialist.

In IRS offshore disclosure, experienced tax attorneys will have 20+ years of attorney experience and additional advanced credentials.

By Golding & Golding, Attorneys at Law, CaliforniaTop of Form

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