Singapore’s DTA with South Africa enter into force on 16 December 2016

On By taxsgIn Corporate Tax, Withholding Tax

24 December 2016

The Avoidance of Double Taxation (DTA) agreement between Singapore and South Africa was gazetted on 16 December 2016 and will take effect from 1 January 2017.

The DTA signed on 30 November 2015 includes the internationally agreed Standard for the exchange of information for tax purposes, provides greater clarity on taxing rights, minimises the scope of double taxation between the two nations and provides mutually beneficial favourable tax treatment for capital gains.

The withholding tax rates under the treaty are as follows:

  • Dividends — 5% of the gross amount of the dividends if the beneficial owner is a company which holds at least 10% of the capital of the company paying the dividends, or 10% of the gross amount of the dividends in all other cases. However, since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest — 7.5%. Exempted from tax if paid to the relevant government authorities of the other Contracting State.
  • Royalties — 5%.

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

Source: Inland Revenue Authority of Singapore (IRAS)