Singapore and Ecuador Sign DTA

28 June 2013

Singapore and Ecuador signed an Agreement for the Avoidance of Double Taxation (DTA) on 27 June 2013.

The DTA includes the internationally agreed Standard for the exchange of information for tax purposes, 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 — Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other State. Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest — 10%. Exempted from tax if paid between the relevant government authorities of the contracting states.
  • Royalties — 10%.

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

Singapore and Liechtenstein Sign DTA

28 June 2013

On 27 June 2013, Singapore and Liechtenstein signed an Agreement for the Avoidance of Double Taxation (DTA).

The DTA includes the internationally agreed Standard for the exchange of information for tax purposes, 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 — Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other State. Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest — 12%. Exempted from tax if paid between the relevant government authorities of the contracting states.
  • Royalties — 8%.

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

Singapore and the Czech Republic sign protocol to amend the existing DTA

28 June 2013

Singapore and the Czech Republic have signed a Protocol on 26 June 2013 to enhance co-operation by amending their standing Agreement for the Avoidance of Double Taxation (DTA) to incorporate the internationally agreed Standard for the exchange of information for tax purposes.

In addition, the Protocol lowers the royalty withholding tax rates (5% – any industrial, commercial or scientific equipment; 10% – any industrial, commercial or scientific equipment) and extends mutually favourable tax treatment for shipping income and capital gains.

The original DTA was signed on 21 November 1997.

The protocol will enter into force after its ratification by both countries.

Source: Inland Revenue Authority of Singapore

IRAS issues e-Tax Guide, ‘Income Tax: Tax Deduction for Expenses Incurred on Renovation or Refurbishment Works Done to Your Business Premises’ (6 June 2013)

19 June 2013

On 6 June 2013, the Inland Revenue Authority of Singapore (IRAS) issued a e-Tax Guide, ‘Income Tax: Tax Deduction for Expenses Incurred on Renovation or Refurbishment Works Done to Your Business Premises’.

This e-Tax Guide explains the tax deduction granted under section 14Q of the Income Tax Act (ITA) for the capital expenses incurred for renovation or refurbishment works done to business premises.

Certain qualifying capital expenses, up to a cap, incurred on or after 16 February 2008 for renovation or refurbishment works done to business premises can be claimed as a tax deduction against the income earned from the business. The original expenditure cap of $150,000 is increased to $300,000 from YA 2013 onwards.

The deduction is given over a period of three consecutive years on a straight-line basis, starting from the year of assessment those expenses are incurred.

The previous e-tax guide published on 6 June 2012 is updated with the following changes:

• Paragraph 9 has been revised to remove the requirement to submit the following together with the tax return:

(a) An itemised list (including the related costs incurred) of the renovation and refurbishment works done to the business premises; and

(b) Confirmation in the tax return (on the itemised list) that the renovation or refurbishment works do not require the approval of the Commissioner of Building Control.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website. Visit http://www.iras.gov.sg/ for more information.

Public consultation on parent relief

19 June 2013

The Inland Revenue Authority of Singapore (IRAS) is conducting a public consultation exercise to gather views from members of the public on how parent relief should be allowed.

Currently, only one taxpayer can claim parent relief on his/her elderly parent. The relief amount is fixed for each elderly parent being supported. Should there be several family members supporting the elderly parent, the onus is on the family members to decide who should claim the parent relief.

IRAS would like to invite the public to share their views on how the parent relief should be allowed in the following scenarios:

  • Where taxpayers are unable to agree among themselves who should claim the parent relief
  • Where taxpayers are unable to agree on how the relief may be apportioned among themselves
  • Where the elderly parent has indicated the parent relief be given to a particular taxpayer when family members are unable to agree on how the relief may be apportioned

The consultation paper detailing the current claim guidelines and the above proposals can be found on the IRAS website and the Government’s consultation portal, REACH.

The exercise will run from 13 June to 26 July 2013.

For more details, please refer to the IRAS’s website.

Source: IRAS