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Singapore Double Tax Treaties Guide


Singapore has signed avoidance of Double Taxation Agreements (DTAs) with more than 70 countries. The purpose is to protect individuals and companies from double taxation to some extent. Because of these treaties, the income earned through cross-border trade is not taxed twice. It saves time, money, a lot of administrative work for the companies involved.

The impact of globalization has been palpable with a tremendous increase in international trade and commerce. This has also resulted in a steep rise in the movement of highly skilled professionals across the borders seeking to boost their careers & employment opportunities.

The cross-border economic activities are generally taxed twice. However, DTAs signed by the Singaporean government and its trading partner countries simplifies the taxation for their respective subjects. It naturally, reduces the paper-work, bureaucratic hurdles, and red tap for the companies.


Simplifying Taxation for Cross-Border Traders

Double taxation is a serious threat to the very concept of globalization and cross-border transactions. The DTA treaties, therefore, compels countries across the globe to make certain alterations to their respective tax systems. In order to avoid the same chargeable income being taxed by two or more countries, governments of various countries have entered into double tax agreements (DTA) with one another.

Singapore, which is a prominent business and finance hub of South-east Asia, also protects its residents from the adverse effects of double taxation. It is an important aspect of the trade, as Singapore has sea-links with more than 600 harbours spread throughout the world.

Let us take a sneak-peak into the various types of income that come under DTA and the methods to avoid being taxed by more than one country on the same taxable income.


Kinds of Income Which Come Under Double Tax Treaties

1 Business profits; 9 Students and trainees;
2 Income from air and shipping transport; 10 Artists;
3 Income from immovable properties; 11 Sportspersons;
4 Interest; 12 Independent personal services;
5 Dividends; 13 Dependent personal services;
6 Royalties & fees paid for offering technical services; 14 Remuneration &  pension with respect to government service;
7 Associated enterprises; 15 Non-government pensions and annuities;
8 Capital gains; 16 Income of government; and
9 Teachers and researchers; 17 Other income.


Purpose of Double Tax Agreement (DTA)

  • A double tax agreement (DTA) clearly states the taxing right of every country.
  • It defines the jurisdictional authority on cross-border transactions, which in turn helps you avoid double tax.
  • DTA permits you to claim for relief on the tax paid on foreign soil.
  • It helps in the prevention of International tax evasion.


How to Avoid Double Taxation?

Broadly, there are two ways by which you can avoid the menace of double taxation. They are:

  • Tax Exemption: If your resident nation agrees to exempt the foreign-sourced income from domestic tax, either completely or partially.
  • Tax Credit: If your resident nation agrees to offer you credit on the tax paid on foreign soil.

SBS Consulting with its expert team of tax consultants offers you services related to the avoidance of double taxation with an extensive guidance on DTA. With our range of Singapore taxation services, we promise you to meet all your tax compliant matters in a professional and timely manner.

Please feel free to contact us on +65 6536 0036 or drop in an email at info@sbsgroup.com.sg

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