Tag: Agreement for the Avoidance of Double Taxation (DTA)

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)

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)

Protocol to Singapore’s DTA with Russia comes into force

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

6 December 2016

On 25 November 2016, the Protocol amending the standing Agreement for the avoidance of double taxation (DTA) between Singapore and the Russia came into force. Its provisions will take effect from 1 January 2017.

Amongst other changes, the Protocol lengthens the threshold period for determining the presence of a permanent establishment and lowers the withholding tax rates for dividends, interest and royalties.

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

  • Dividends —

(a) (i) 5% of the gross amount of the dividends if the beneficial owner of the dividends is a company which holds directly at least 15% of the capital of the company paying the dividends, (ii) 10% of the gross amount of the dividends in all other cases;

(b) in the case of distributions paid by the real estate investment fund: 10% of the gross amount of the distributions.

  • Royalties — 5% of the gross amount of the royalties
  • Interest — interest arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State.

The original DTA was signed on 9 September 2002.

The full text of the Protocol is available on the IRAS’s website.

Source: IRAS