Category: Withholding Tax

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 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)

Singapore’s DTA with Laos comes into force

On By taxsgIn Corporate Tax, Tax Treaties, Withholding Tax

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)

Singapore and Ethiopia sign tax treaty

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

28 August 2016

Singapore and Ethiopia signed an Agreement for the Avoidance of Double Taxation (DTA) on 24 August 2016. 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 — 5%.  Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest — 5%. Exempted from tax if paid between the relevant government authorities of the contracting states.
  • Royalties — 5%.

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)