Singapore Tax Treaties Guide

Singapore has established itself as a global financial hub, thanks to its extensive network of tax treaties. These treaties, known as Double Taxation Agreements (DTAs), help minimize the impact of double taxation on cross-border income.

What are Tax Treaties?

Tax treaties, or Double Taxation Agreements (DTAs), are bilateral agreements between two countries that define tax treatment for income earned across borders.

• Prevent double taxation on the same income.
• Clarify tax jurisdictions.
• Facilitate trade and investment.

Benefits of Singapore's Tax Treaties

• Avoidance of Double Taxation: Income is not taxed twice in different jurisdictions.
• Reduced Withholding Tax Rates: Lower tax rates on dividends, interest, and royalties.
• Tax Exemptions: Certain income types may be exempt from tax.
• Increased Certainty: Provides clear tax jurisdiction rules.
• Tax Credits: Claim credits for taxes paid in foreign countries.

Key Features of Singapore's Tax Treaties

• Scope of DTAs: Covers business profits, dividends, interest, royalties, employment income, and capital gains.
• Permanent Establishment (PE): Defines taxable business presence in a foreign country.
• Mutual Agreement Procedure (MAP): Mechanism for resolving tax disputes.
• Exchange of Information: Enables tax authorities to share information to prevent tax evasion.

List of Singapore's Tax Treaty Partners

Singapore has DTAs with over 90 countries, including:

• Asia-Pacific: China, India, Japan, Australia, Malaysia.
• Europe: Germany, France, UK, Netherlands.
• Americas: Canada, Mexico, Brazil.
• Middle East: UAE, Saudi Arabia, Qatar.

How to Claim Benefits Under a DTA

1. Determine Eligibility: Ensure tax residency in Singapore or a treaty partner country.
2. Obtain a Certificate of Residency (COR): Apply to IRAS for certification.
3. File the Relevant Forms: Submit required forms (e.g., Form IR37 for withholding tax reduction).
4. Maintain Documentation: Keep tax records for audit purposes.

Common Tax Treaty Benefits

• Reduced Withholding Tax Rates: 0%-15% for dividends, 0%-10% for interest, 5%-10% for royalties.
• Exemption on Business Profits: Taxed only in the country of residence unless there is a permanent establishment.
• Tax Credits: Credit for foreign taxes paid.
• Shipping and Air Transport Exemptions: Typically exempt from tax.

How Apexia Corporate Advisory Can Help

• DTA Advisory: Assess eligibility for treaty benefits.
• COR Application Support: Assist with obtaining a Certificate of Residency from IRAS.
• Tax Compliance Services: Ensure compliance with Singapore and foreign tax laws.
• Dispute Resolution: Support in resolving tax disputes through the Mutual Agreement Procedure (MAP).