If the payer bears the tax for the non-resident professional under
contractual terms (i.e. payment to payee is treated as net of tax), the
withholding tax would be computed on a re-grossed basis.
The payer remains responsible for the payment of withholding tax which will be calculated at the rate of 15% of the re-grossed amount.
Under the terms of engagement, the income of $8,400 (as shown in example 1) is net of Singapore withholding tax. Hence, it is to be re-grossed at the rate of 15%:
$8,400 x 100% = $9,882.35
85%*
Payer is required to account for withholding tax at the rate of 15% on the re-grossed amount: $9,882.35 x 15% = $1,482.35.
*100% - applicable tax rate