24 Sep 2012
On 21 September 2012, Singapore and the Isle of Man signed an agreement for the avoidance of double taxation (“DTA”).
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 —Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State and which are beneficially owned by that resident shall be taxable only in that other State. Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
- Interest — 12%. Exempted from tax if paid between the relevant government authorities of the contracting states.
- Royalties — 8%.
The DTA is awaiting ratification and does not have the force of law.
The full text of the DTA is available on the IRAS website.
Source: Inland Revenue Authority of Singapore (IRAS)