A Beginner’s Guide to Expat Accounting
Moving to a new city often involves more than just finding the best local coffee shop; it means navigating a complex web of legal and financial obligations. Whether you’re securing your visa through immigration lawyers in London or mapping out your first tax year in Southeast Asia, being proactive is the key to a smooth transition.
This guide breaks down the essential accounting principles you need to know to protect your wealth and stay compliant while living the expat life.
Golden Rules
The biggest mistake expats make is assuming that because they no longer live in their home country, they no longer owe it anything. Most countries tax based on residency (where you live most of the year). However, some countries (notably the United States) tax based on citizenship, regardless of where you reside.
For example, tax residency is usually triggered if you spend more than 183 days in a country. Additionally, the “Exit Tax”, which is being introduced in more places as of late, some countries require you to “settle up” as in pay a lump sum of tax for leaving or declare your departure to stop being taxed as a resident. Some places only enforce an exit tax on a settlement if you are earning above a certain bracket.
Understanding “Double Taxation”
The fear of being taxed twice on the same dollar is real, but fortunately, “Double Taxation Agreements” (DTAs) exist between many nations. These treaties ensure you aren’t paying full tax to two different governments. This is not only unfair but also unreasonable for every wage bracket.
To navigate this, you’ll need to become familiar with these two things:
Foreign Tax Credits (FTC), which allows you to subtract the taxes paid to your host country from what you owe back home. The foreign earned income exclusion (FEIE) is a rule (common for US citizens) that allows you to exclude a certain amount of foreign earnings from your home country’s taxable income.
This is information that you should become familiar with before you pack up and move to avoid overpaying for a period of time, and so forth.
The Territorial Advantage
In Singapore, they generally follow a territorial tax system, which means you are only taxed on income you earn within Singapore’s borders, which is ideal and prevents the need for needless paperwork.
For example, if you have a rental property in London and receive dividends from French stocks, this income is generally tax exempt even if you bring or use that money in Singapore, provided you are an individual tax resident. Therefore, if you pay tax, you won’t be asked to pay more for international business.
As of 2024 and more enforced in 2026, Singapore has introduced rules to address the sale of foreign assets. While most individual expats are safe from taxation, if you sell foreign property or share through a business structure with inadequate economic substance, then you might face tax liability if you then want to bring the money into Singapore. Consider speaking with local accountants and practising professionals to establish what liability you will face.
SRS The Expat Secret Tax Shield
Since expats (non-PRs) do not contribute to the Central Provident Fund (CPF), they miss out on a massive local tax relief. Enter the supplementary retirement scheme (SRS). Any dollar you put into an SRS account is deducted from your taxable income for the year. In 2026, the contribution cap for foreigners is significantly higher than for locals. If you are in a high tax bracket, this can save you thousands in immediate tax.