18 February 2016

The Avoidance of Double Taxation (DTA) agreement between Singapore and Thailand was gazetted on 15 February 2016 and will take effect from 1 January 2017.

Singapore and Thailand signed a revised agreement for the Avoidance of Double Taxation (DTA) on 11 June 2015. Amongst the changes are the updates to the provisions for determining permanent establishments and lower withholding tax rates for dividends, interest and royalties.

The withholding tax rates under the revised treaty are as follows:

• Dividends — 10%. However, since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
• Interest — 10% if the interest is derived and beneficially owned by any financial institution or insurance company; or owned by a resident of the other Contracting State and is paid with respect to indebtedness arising as a consequence of a sale on credit by a resident of that other Contracting State of any equipment, merchandise or services, except where the sale was between persons not dealing with each other at arm’s length; 15% in all other cases.
• Royalties — 5% if they are made as consideration for the use or the right to use any copyright of literary, artistic or scientific work including cinematograph films, or films or tapes used for radio or television broadcasting; 8 % for the use of, or the right to use, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment; 10% in all other cases.

The full text of the DTA is available on the IRAS website.

The original DTA was signed on 15 September 1975.