9 November 2012

On 4 November 2012, Singapore and Poland signed an enhanced Agreement for the avoidance of double taxation (DTA).

The enhanced 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 enhanced DTA provides lower withholding tax rates for interest, dividend and royalty incomes, as well as more liberal permanent establishment rules compared to the existing DTA. The rates under the treaty are as follows:

• Dividends — 5% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which controls directly at least 10% of the capital of the company paying the dividends on the date the dividends are paid and has done so or will have done so for an uninterrupted 24-month period in which that date falls; 10% of the gross amount of the dividends in all other cases.
• Interest — 5%. Exempted from tax if paid between the relevant government authorities of the contracting states.
• Royalties — 2% of the gross amount of the royalties paid for the use of, or the right to use any industrial, commercial, or scientific equipment; 5% of the gross amount of the royalties in other cases.

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)