Singapore Tax Treaties with other countries

Singapore has signed Double Taxation Agreements (DTA) with 94 countries.
Tax treaty between Singapore and other countries spells out the taxing rights on the different types of income arising from cross-border economic activities between the two jurisdictions.

Treaty partners with Singapore can enjoy the benefits of the DTAs when they derive income from Singapore.
To claim the benefit, they must prove the tax resident of the treaty partner by submitting to IRAS, a completed Certificate of Residence from Non-Residents that must be certified by the tax authority of their country of residence.

Singapore Tax Treaties with China <click me
Singapore Tax Treaties with Taiwan <click me

Email: sin4ww@evershinecpa.com

Singapore CPA Lau Wei-Koon, speak in both English and Chinese
215 Henderson Road #03-03 Henderson Industrial Park Singapore 159554

We set up below judgment criteria on Treaty application:

Scenario:
If you are not a Singapore legal resident, and if your resident country has DTA with Singapore, and if you are without PE (Permanent Establishment), please go to Section A.
If you are not a Singapore legal resident, and if your resident country has DTA with Singapore, and if you are with PE (Permanent Establishment) please go to Section B.
If you are not a Singapore legal resident, and if your resident country has no DTA with Singapore, please go to Section C.

Section A:
Scenario: If you are not a Singapore legal resident, and if your resident country has DTA with Singapore, and if you are without PE (Permanent Establishment), it will be redeemed as “non-Singapore Domestic Sourced Income”.
That means Singapore will levy zero-tax.
However, you still need to send zero-tax application to Singapore Tax Bureau for being approved.
Below, we will let you understand through Q&A.

DTA-Q-10:
新加坡的哪些外國法律居民公司可以依DTA申請沒有常設機構(PE)下零稅率?
In Singapore, which foreign legal resident company can apply for zero tax rate without PE under DTA?

DTA-A-10:
Singapore has signed DTAs with the following 94 countries:

*Agreements signed but not ratified.

DTA-Q-20:
為什麼在DTA下該國外資沒有常設機構 (PE)之外資所得，可以享受零稅率?
Why does the Country’s foreign capital without a permanent establishment (PE) in Singapore, under the DTA enjoy zero tax rate?

DTA-A-20:
It follows Article 5 and Articles 7 in the DTA Treaty. The article defines if foreign entity has PE in Singapore.
Article 7 regulates if no PE, non-Singapore domestic sourced income will not be levied tax in Singapore.

DTA-Q-30:
哪些情況被視為沒有PE，外資在該國設立子公司會被視為外資的在該國的子公司嗎?
Under what circumstances are deemed to have no PE, and will the establishment of a foreign-funded subsidiary in Singapore be regarded as a foreign-funded subsidiary in Singapore?

DTA-A-30:
According to DTA Article 5 item 7, A Wholly Foreign Owned subsidiary in Singapore will not be treated as PE because it is a separate legal entity.
That means if a Singapore Subsidiary pay service fee to non- Singapore Parent Company through a service contract signed between subsidiary and non – Singapore Parent company
as an investor, non- Singapore Parent Company can apply zero tax.
As for if the paid amount is reasonable, it will get involved TP (Transfer Pricing) judgment by Singapore Tax Bureau.
Please see the Singapore Transfer Pricing webpage.

DTA-Q-40:
外資在新加坡設立分公司或辦事處，可否適用沒有PE下的零稅率?
If a foreign company establishes a branch or office in Singapore, can the zero-tax rate without PE be applied?

DTA-A-40:
According to DTA Article 5 item 2, If a foreign company sets up a branch or office in Singapore, then will be considered as Singapore domestic Income.
But According to DTA Article 5 item 4，if an Office is only doing preparatory or auxiliary activity, will apply a zero-tax rate.

DTA-Q-50:
新加坡依DTA沒有PE下零稅率申請的程序為何?
What is the procedure for Singapore to apply for a zero tax rate under DTA without PE?

DTA-A-50:
Approval for tax exemption must be obtained from the IRAS.
IRAS will grant the tax exemption if the following conditions are met:

1. At least 15% in corporate taxes are paid on the income sourced from the foreign jurisdiction.
2. The company has been subjected to tax in the foreign jurisdiction, this can be different from the headline tax; and
3. The IRAS is satisfied that granting the tax exemption will benefit the tax resident in Singapore.

Below are the documents required:

*A No PE declaration letter
*Certificate of residence (COR) issued by the competent authority of the beneficial owner’s country of residence (Certified and in English)
*Submit the document to IRAS by 31 March of the following year if the claim is for a period in the current calendar year.
Refer to the below website for further details: –

https://www.iras.gov.sg/irashome/Other-Taxes/Withholding-tax/Filing-and-Paying-Withholding-Tax/When-to-File-and-Pay-Withholding-Tax/Claiming-Relief/Exemption-under-the-Avoidance-of-Double-Taxation-Agreement/

Section B:
Scenario: If you are not a Singapore legal resident, and if your resident country has DTA with Singapore, and if you are with PE (Permanent Establishment), your income will be considered as Singapore domestic sourced income.
As for levying Tax Rate, please be aware:
if Singapore Tax rate > DTA Rate, adopt DTA Rate; if Singapore Tax rate < DTA Rate, adopt Singapore Rate.
Below, we will let you understand through Q&A

DTA-Q-60:
被視為新加坡來源所得的判定要素?
What are the factors that are deemed to be the country’s domestic source income?

DTA-A-60:

1. Any trade or business carried on in Singapore, the gains or profits of the trade or business shall be deemed to be derived from Singapore.
2. Interest, commission, fee which is borne, directly or indirectly, by a person resident in Singapore except in respect of any business carried on outside Singapore. Or interest income derived from loans where the funds provided by such loans are brought into or used in Singapore.
3. Royalties are borne, directly or indirectly, by a person resident in Singapore.

DTA-Q-70:
DTA第五條及第七條優先於新加坡來源所得的判定要素?
Do Article 5 and Article 7 in the DTA take precedence over the Singapore determination factors on Singapore domestic sourced income?

DTA-A-70:
When DTA is applied, in the event of a different PE definition between Singapore domestic tax laws and Article 5 in the DTA, the definition under the DTA shall prevail the domestic regulations.
When DTA is applied, if a foreign company is defined as without PE (Permanent Establishment) in Singapore, then will be considered non-Singapore domestic sourced income, in the event business profit is relevant to this issue, the clause in Article 7 in the DTA zero-rate tax can be applied accordingly.
In this scenario, please see section A.

DTA-Q-80:
當非新加坡稅務居民有新加坡來源所得，不考慮DTA 情況下，新加坡稅法扣繳稅率多少?
When non-tax residents of Singapore have Singapore domestic sourced income, what is the withholding tax rate according to Singapore tax regulations excluding DTA?

DTA-A-80:
A person must withhold tax and pay to the Inland Revenue Authority of Singapore (IRAS), when a non-resident company derives specified nature of income from a Singaporean source, for services provided or work done in Singapore.

The withholding tax rates under domestic law are:
Business Profits – 17%
Dividend – 0%
Interest (General loan) – 15%
Royalties fee – 10%
Technical services – 17%
Professional services – 15%

DTA-Q-90:
If DTA Tax Rate is higher than Singapore tax rate, apply which tax rate?

DTA-A-90
As for levying Tax Rate, please be aware:
if Singapore Tax rate > DTA Rate, adopt DTA Rate; if Singapore Tax rate < DTA Rate, adopt Singapore Rate.

DTA-Q-A0:
當非新加坡稅務居民有新加坡來源所得，依DTA優惠稅率申請的程序為何?
When non-tax residents of Singapore have Singapore domestic sourced income, what is Singapore’s application procedure based on the DTA preferential tax rate?

DTA-A-A0:
Approval for tax exemption must be obtained from the IRAS.
*Certificate of residence (COR) issued by the competent authority of the beneficial owner’s country of residence (Certified and in English)
*Submit the document to IRAS by 31 March of the following year if the claim is for a period in the current calendar year.
Refer to the below website for further details: –
https://www.iras.gov.sg/irashome/Other-Taxes/Withholding-tax/Filing-and-Paying-Withholding-Tax/When-to-File-and-Pay-Withholding-Tax/Claiming-Relief/Exemption-under-the-Avoidance-of-Double-Taxation-Agreement/

Section C:
DTA-Q-B0:
As an investor, if your country has not signed DTA with Singapore, what kinds of tax rates when you have Singapore relevant income?

DTA-A-Q0:
If you are not a Singapore legal resident, and if your resident country has no DTA with Singapore,
Whatever you are with PE or without PE, all kinds of income will be levied according to Singapore’s domestic sourced income.
Besides, it will be levied by Singapore Tax Rates.

The withholding tax rates under domestic law are:
Business Profits – 17%
Dividend – 0%
Interest (General loan) – 15%
Royalties fee – 10%
Technical services – 17%
Professional services – 15%

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Singapore Evershine BPO Service Limited Corp.
E-mail: sin4ww@evershinecpa.com

Singapore CPA Lau Wei-Koon, speak in both English and Chinese
215 Henderson Road #03-03 Henderson Industrial Park Singapore 159554

or
For how to exchange data files between your Finance Accounting System and Evershine  Cloud Accounting  Information System,
please send an email to HQ4sin@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable to your case.
Email address:dalechen@evershinecpa.com
linkedin address: Dale Chen

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