Category: Tax Treaties

Singapore-Turkmenistan DTA Agreement Enters into Force

On By taxsgIn Tax Treaties

An agreement for the Avoidance of Double Taxation (DTA), signed by Singapore and the Republic of Turkmenistan on 28 August 2019, entered into force on 30 April 2020.

The effective date of the DTA is 1 January 2021.

Some of the withholding tax rates under the DTA are as follows:

  • Dividends – 10%. 0% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly or indirectly at least 25% of the capital of the company paying the dividends.
  • Interest – 10%. Exempted from tax if paid between the specified relevant government authorities of the contracting states.
  • Royalties – 10%

The full text of the DTA is available on the Inland Revenue Authority of Singapore’s (IRAS) website.

Source: IRAS

Singapore and Ghana sign tax treaty

On By taxsgIn Corporate Tax, Latest Tax News, Tax Treaties, Withholding Tax

4 April 2017

Singapore and Ghana signed an Agreement for the Avoidance of Double Taxation (DTA) on 31 March 2017. The DTA includes the internationally agreed Standard for the exchange of information for tax purposes.

The withholding tax rates under the treaty are as follows:

  • Dividends — 7%.  Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest — 7%. Exempted from tax if paid between the relevant government authorities of the contracting states.
  • Royalties — 7%.

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)

Protocol to Singapore’s DTA with India comes into force

On By taxsgIn Corporate Tax, Latest Tax News, Tax Treaties, Withholding Tax

8 March 2017

The Protocol to the Avoidance of Double Taxation (DTA) agreement between Singapore and India has come into force and take effect on 27 February 2017, except for Articles 2, 3 and 4 which shall take effect from 1 April 2017.

The Protocol signed on 30 December 2016 gradually phases out the capital gains tax exemption on shares from 1 April 2017, following the same with the India-Mauritius DTA.

The tax treatment for gains on shares acquired on or after 1 April 2017 is as follows:

A. For gains that arise during 1 April 2017 to 31 March 2019:

  • Tax rate imposed on such gains will be limited to 50% of the tax rate applicable on such gains in the State in which the company whose shares are alienated is resident.
  • Subject to specified conditions including expenditure on operations of the alienator in its residence State of at least S$200,000 in Singapore or Indian Rs5,000,000 in India, as the case may be, for the immediately preceding period of 12 months from the date on which the gains arise.

B. Gains that arise after 31 March 2019 will be taxable in the State in which the company whose shares are alienated is resident.

For shares acquired before 1 April 2017, there is no change to the existing tax treatment on gains arising from the alienation of such shares, i.e.

  • Remain taxable only in the residence State of the alienator.
  • Subject to specified conditions including expenditure on operations of the alienator in its residence State of at least S$200,000 in Singapore or Indian Rs5,000,000 in India, as the case may be, for each of the 12-month periods in the immediately preceding period of 24 months from the date on which the gains arise.

The Protocol also updates Article 9 on Associated Enterprises to provide for both countries to enter into bilateral discussions for elimination of double taxation arising from transfer pricing or pricing of related party transactions.

The full text is available on the IRAS website.

Source: Inland Revenue Authority of Singapore (IRAS)

Singapore’s DTA with Uruguay to enter into force on 14 March 2017

On By taxsgIn Corporate Tax, Latest Tax News, Tax Treaties

3 March 2017

The Avoidance of Double Taxation (DTA) agreement between Singapore and Uruguay will come into force on 14 March 2017 and take effect from 1 January 2018.

The DTA signed on 15 January 2015 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 — 5% in the case of at least 10% shareholdings, and 10% in all other cases. Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest — 10%.
  • Royalties  — 5% of the gross amount of the royalties for the use of, 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; 10% in all other cases.

The full text is available on the IRAS website.

Source: Inland Revenue Authority of Singapore (IRAS)

Protocol to DTA signed between Singapore and India: Phasing out of capital gains tax exemption on share-market investments originating from Singapore

On By taxsgIn Corporate Tax, Latest Tax News, Tax Treaties

13 January 2017

On 30 December 2016, Singapore and India signed a Protocol to amend the existing Singapore – India Avoidance of Double Taxation Agreement (DTA) to gradually phase out the capital gains tax exemption on shares from 1 April 2017.

As the India-Mauritius DTA will phase out capital gains tax exemption, the Singapore-India DTA which is pegged to the India-Mauritius DTA, has to be similarly amended.

Hence, the tax treatment for gains on shares acquired on or after 1 April 2017 is as follows:

A. For gains that arise during 1 April 2017 to 31 March 2019:

  • Tax rate imposed on such gains will be limited to 50% of the tax rate applicable on such gains in the State in which the company whose shares are alienated is resident.
  • Subject to specified conditions including expenditure on operations of the alienator in its residence State of at least S$200,000 in Singapore or Indian Rs5,000,000 in India, as the case may be, for the immediately preceding period of 12 months from the date on which the gains arise.

B. Gains that arise after 31 March 2019 will be taxable in the State in which the company whose shares are alienated is resident.

For shares acquired before 1 April 2017, there is no change to the existing tax treatment on gains arising from the alienation of such shares, i.e.

  • Remain taxable only in the residence State of the alienator.
  • Subject to specified conditions including expenditure on operations of the alienator in its residence State of at least S$200,000 in Singapore or Indian Rs5,000,000 in India, as the case may be, for each of the 12-month periods in the immediately preceding period of 24 months from the date on which the gains arise.

The Protocol also updates Article 9 on Associated Enterprises to provide for both countries to enter into bilateral discussions for elimination of double taxation arising from transfer pricing or pricing of related party transactions.

The DTA has yet to be ratified and therefore does not have the force of law.

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

The original DTA was signed on 24 January 1994.

Source: IRAS and Ministry of Finance