Singapore’s DTA with Laos comes into force

17 November 2016

Singapore and Lao People’s Democratic Republic’s revised Agreement for the Avoidance of Double Taxation (DTA) came into force on 11 November 2016, and will take effect from 1 January 2017.

The DTA will encourage and facilitate cross-border trade and investment between Singapore and Laos by providing greater clarity on taxing rights and minimising the scope of double taxation between the two countries. Amongst other provisions, the DTA provides for lower withholding tax rates on cross-border payments of dividends, interest and royalties.

The withholding tax rates under the DTA are as follows:

  • Dividends —

(a) 5% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends,

(b) 8% of the gross amount of the dividends in all other cases.

  • Interest — 5%. (Exempted from tax if paid to the government of the other Contracting State).
  • Royalties — 5%.

The full text is available on the IRAS website.

Source: Inland Revenue Authority of Singapore (IRAS)