A number of new and revised DTAs signed by Singapore with various countries previously have entered into force over the last 15 months.
These countries include Belarus, Guernsey, Isle of Man, Jersey, Morocco, Poland and Vietnam.
The key provisions of the DTAs include:
| Country || Date |
| Date of |
| Effective |
| Threshold period |
for a services
| Dividends % || Interest % || Royalties % || Others |
| Belarus || 22 Mar 13 || 27 Dec 13 || 01 Jan 14 || 270 days in any |
| 5 (a) || 5 (a) || 5 || (b) (c) |
| Guernsey || 06 Feb 13 || 26 Nov 13 || 01 Jan 14 || 365 days in any |
| 0 (d) || 12 (a) || 8 || (b) (c) (i) |
| Isle of Man || 21 Sep 12 || 02 May 13 || 01 Jan 14 || 365 days in any |
| 0 (d) || 12 (a) || 8 || (b) (c) |
| Jersey || 17 Oct 12 || 02 May 13 || 01 Jan 14 || 365 days in any |
| 0 (d) || 12 (a) || 8 || (b) (c) |
| Morocco || 09 Jan 07 || 15 Jan 14 || 01 Jan 15 || 135 days in any |
| 10 (e) || 10 (a) || 10 || (b) |
| Poland (f) || 04 Nov 12 || 06 Feb 14 || 01 Jan 15 || 365 days in any |
| 10 (a) (g) || 5 (a) || 5 (h) || (b) (c) (i) (j) |
| Vietnam (k) || 12 Sep 12 || 11 Jan 13 || 01 Jan 14 || 183 days in any |
| 12.5 (l) || 10 (m) || 10 (n) || (b )(c) |
Singapore signed a DTA with Brazil on 20 December 2013 for the avoidance of double taxation on profits derived from international air and shipping transport. It entered into force on the same day and has effect in respect of tax chargeable for any year of assessment (YA) beginning from YA 2015.
The Protocols to the DTAs signed by Singapore with the following countries to incorporate the internationally agreed Standard for the exchange of information (EOI Standard) have entered into force:
| Country || Date signed || Date of entry into force or effective date |
| Belgium || 16 July 2009 || 20 September 2013 |
| Malta || 20 November 2009 || 28 June 2013 |
| Portugal || 28 May 2012 || 26 December 2013 |
| South Korea || 24 May 2010 || 28 June 2013 |
| Turkey || 5 March 2012 || 7 August 2013 |
- DTAs with low tax jurisdictions like Guernsey, Isle of Man and Jersey provide for a higher rate of withholding tax (12% for interest; 8% for royalties) as compared to the lower rates of 5% or 10% under the other DTAs.
- DTAs that were signed in recent years appear to provide for lower rates of withholding tax for interest and royalties payments.
- The DTAs with Guernsey and Poland provide for the trustee to be the deemed beneficial owner of the income for the purposes of the Articles on dividends, interest and royalties.
- The PE article in the above comprehensive DTAs provides for services PE apart from the usual fixed place PE. A services PE typically exists if services, including consultancy services are performed in the other Contracting State through employees or other personnel, which continue for a specified period. Except for Belarus, Morocco and Vietnam, the threshold period for the services PE can be more than 365 days in any 15-month period. In the case of Belarus, Morocco and Vietnam, the threshold period for the services PE ranges from 135 days to 270 days in any 12-month period.
- With the exception of Morocco, all the DTAs have incorporated the EOI Standard. For Morocco, the DTA was ratified without re-negotiating for the EOI Standard. This could be due to the fact that the DTA with Morocco was signed before Singapore endorsed the EOI Standard in March 2009, and Singapore has also legislated that she would extend the EOI Standard to all existing DTA partners, subject to reciprocity, without the need to amend and update individual DTAs to incorporate the EOI Standard.
- We are seeing specific anti-abuse provisions being incorporated into certain DTAs that Singapore has concluded with its treaty partners. The recently concluded DTA with Poland is an example, where it is provided that the benefits of the Articles on dividends, interest and royalties will not apply if the main purpose was to take advantage of the Article concerned.
- The revised DTA with Poland also has a number of improvements over the previous DTA, such as the Remittance Clause in Article 27 which essentially requires that the relief under the treaty may be claimed only if the income remitted or received in Singapore is subject to tax. The revised clause now provides that such a requirement is not applicable to income derived from Poland which is exempted from tax in Singapore. This clause will cover specified income under the foreign specified income exemption regime in Singapore.
(a) Exempt in certain circumstances. ×
(b) Capital gains are taxable only in the country of residence except for gains from the disposal of the following:
- Immovable property
- Movable property forming part of the business property of a PE in the country of source or movable property pertaining to a fixed base available for the purpose of performing independent personal services
- In the case of Belarus, Morocco, Poland and Vietnam, unlisted shares, deriving a specified percentage of their value directly or indirectly from immovable property.
(c) The DTA incorporates the internationally agreed Standard for the exchange of information.
(d) Dividends are taxable only in the Contracting State where the recipient of the income is a resident of.
(e) 8% if the beneficial owner is a company which holds directly at least 10% of the capital of the company paying the dividends.
(g) 5% if the beneficial owner is a company (other than a partnership) which controls directly at least 10% of the capital of the company paying the dividends on the date the dividends are paid and has done so or will have done so for an uninterrupted 24-month period in which that date falls.
(h) 2% if payment is for the use of, or the right to use any industrial, commercial or scientific equipment.
(i) The trustee is deemed to be the beneficial owner of the income for purposes of the Articles on dividends, interest and royalties.
(j) Includes anti-abuse provisions.
(k) Second Protocol to the DTA (see EY International Tax Alert dated 19 November 2012).
(l) No change in withholding tax rates (i.e., exempt if paid to the Government of Singapore; 5% or 7% depending on the amount of capital contribution made by the beneficial owner, which must be at least 25% of the capital of the company paying the dividends; 12.5% in all other cases) but dividends derived by the Government of Singapore from the carrying on of commercial activities will no longer be exempt.
(m) No change in withholding tax rate (10%) for interest but it will be reduced to a lower rate if Vietnam enters into a DTA with another country which provides for a rate that is lower than 10%.
(n) The withholding tax rate is reduced from 15% to 10% for royalties, other than for payments for the use of or right to use, any patent, design or model, plan, secret formula or process, or for the use of or right to use industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience, which continues to enjoy the lower withholding tax rate of 5%.