22 December 2011

Singapore’s agreement with Panama for the avoidance of double taxation (DTA) came into force on 19 December 2011 and will be effective on 1 January 2012.

The DTA includes the internationally agreed Standard for the exchange of information for tax purposes upon request, and provides greater clarity on taxing rights and minimises the scope of double taxation between the two nations. The withholding tax rates under the treaty are as follows:

• Dividends  — 4% in the case of at least 10% shareholdings, and  5% in all other cases. Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
• Interest — 5%. Will be exempted from tax in certain cases e.g. if paid between government authorities or financial institutions in the contracting states.
• Royalties — 5%.

This agreement is Singapore’s 68th DTA.

For the full text of the DTA, please click here.

Source: IRAS and e-Gazette