Noob question. If I start a business overseas, do I need to pay my taxes and CPF?

Taxes : no

CPF: no

Firstly, congrats on taking the courage to start up a business overseas. It is said that one of the few ways to accumulate substantial wealth is to start your own business, so here's wishing you all the best. On to your question - although your queries seem straightforward on the surface, there are actually many considerations that have to be examined, so I shall break my answer up into different sections, for clarity and for ease of reading.

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Structure of your business

Are you going to run your business as a sole proprietorship or will you be incorporating a corporate entity (i.e. a company)? There are slight differences between these two. But since you say this is a start-up, and the answers to your questions generally won't differ materially between these two options, I shall assume for the rest of this response that you will be running a sole proprietorship.

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Distinguihsing between source and residency

While most people would assume that profits derived from a business outside Singapore is not taxable in Singapore, this is not always the case in all instances. The key consideration here would be the location of your tax residency. For instance, if you decide to open a business in eg. Malaysia, but you merely send a manager to man the shop there, while you physically remain in Singapore to call the shots, make strategic decisions, exercise management and control in Singapore, then you are actually running a Singapore business. In this case, all profits are considered accruing in Singapore and subject to Singapore tax. Malaysia will also tax your business because it is sourced in Malaysia. You will be effectively taxed twice, then you will have to rely on the Double Taxation Agreement (if there is one with the foreign country) to claim a tax refund via foreign tax credits, subject to conditions.

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However, if you are indeed permanently moving over to the foreign country to run the business full-time over there, then you will be a tax resident of said country. This is a simpler scenario. Your business profits will only be taxed in the foreign country, and Singapore has no rights to tax your business. Again, since this is a start-up, I will assume this is your preferred method.

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Business taxes

Your income from the business (net of deductible expenses) will be taxed in the foreign country at that country's individual tax rate. If you are running a permanent business there, you will likely need to register your business with either their accounting regulatory body or the tax authorities, and you will be issued a tax reference number. Thereafter, you will need to file a tax return annually in that country and pay your taxes due.

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Individual taxes

If you pay yourself a salary through an employment contract with the business, you will also have to pay tax on your salary at the individual tax rate. Similarly, you will need to file an individual tax return with the relevant tax authorities.

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CPF

CPF contributions are not mandatory if you exercise employment outside of Singapore. You may make voluntary contributions to your CPF if you wish. Do note that the foreign country may also operate their own equivalent social security plan. If you are a tax resident of that country, you may be required to contribute to the national pension fund / unemployment insurance / social security program. Please consult a local tax advisor in that country to find out more details.

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As a self-employed person, you are required to make mandatory contributions to your CPF Medisave Account (MA). A self-employed person is defined as any Singapore citizen or Singapore Permanent Resident (SPR) who derives income from Singapore or from outside Singapore through any trade, business, profession or vocation. If you have a net trade of income of at least $6,000 annually, you must make contributions to your MA. The contribution rate varies from 4% to 10.5%, depending on your age and income level. For more details, refer to this table.

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You will need to pay your MA contributions by 31 May of the following year. You can declare your income and make the necessary payment at any CPF Service Centre, SingPost branches, or online via SingPass.

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GST

Depending on the foreign country requirements, if you meet the GST registration criteria, you may be required to collect and pay GST / sales tax to the foreign tax authorities.

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Future business plans

You mentioned that you may expand your business back to Singapore in future. This will likely complicate tax matters, as both countries will seek to tax all your business profits. If you choose not to incorporate separate entities to house each business of the two countries, it will be challenging to convince the tax authorities to assess tax payable only on the income that is attributatble to the enterprise in that country.

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As mentioned at the start, tax residency is a key consideration. If you move back to Singapore in future to oversee and manage your business, your business will be Singapore-sourced. You will then have to file tax returns in both countries, and claim foreign tax credits. Additionally, since your business will no longer be a tax resident of the foreign country, your customers in that country will start withholding tax when making payments to you (sometimes incorrectly, as certain service income may not be taxed in that country). However, this is a problem for another day, so I shall not go into details at this juncture.

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Disclaimer

In providing my comments in this communication, I have relied upon my understanding of current tax legislation, guidelines and known practices of the relevant tax and other relevant authorities as of this date. Should these legislation, guidelines or known practices change, some of the issues/conclusions discussed in this communication may change as well.

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The information and views set out in the above response are those of the author, and do not necessarily represent nor reflect the official opinions or advice by his employer.

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As always, please do your own due dilligence and consult your own tax advisors before making any business decisions.

If I'm not wrong you will need to pay taxes at the country your business is at.

No, since your business is based overseas.
Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable and does not need to be declared. This includes overseas income paid into a Singapore bank account.
https://www.iras.gov.sg/IRASHome/Individuals/Lo...