An overview of the comprehensive bilateral tax treaty between Singapore and India to avoid double taxation of income. Find out more here. If you or your company meets the residency requirements mentioned above, you can use the provisions of a Singapore DTA with Singapore as a state of residence. Note that even if there is no DBA between Singapore and another country with which you do business, you may still be able to avoid double taxation by using Singapore`s unilateral tax credits for Singapore residents. Capital gains were not regulated in the previous DBA agreement. It has been modified in line with the Organisation for Economic Co-operation and Development (OECD) model. The OECD model is an agreement developed by OECD countries, which focuses on guiding tax issues during bilateral negotiations. In this way, the same income is taxed twice. The DBA imposes this double taxation by allowing the Singapore company to charge a tax credit of foreign tax on the same income.
The development of international trade and multinationals has increased the need to address the issue of double taxation. As a company or individual looking for business opportunities and investments beyond your own country, you would of course deal with the problem of taxation, especially if you will have to pay twice taxes on the same income in the host country and in your country of origin. As a result, you are trying to structure your operations to optimize your tax position and reduce costs that, in turn, would increase your global competitiveness. It is the relevance of the DBA or Singapore`s tax treaties that comes into play. Double taxation relief methods are given either under a country`s national tax law or under the tax treaty. In Singapore, the following methods are available: a Singapore resident can avoid double taxation even without a DBA with a given country. This is because Singapore`s domestic legislation (as explained above) exempts from foreign countries most types of income from foreign sources (including dividends, foreign branch profits and outsourcing revenues) that were collected in Singapore on June 1, 2003 or after June 1, 2003, if certain conditions are met. These conditions are summarized: a DBA is an agreement between two countries that aims to avoid double taxation of taxpayers` incomes that can circulate between the two countries. Tax treaties allow them to access double taxation exemptions, either through tax credits, tax exemptions or reduced withholding tax rates. These facilities vary from country to country and depend on different income items.
Learn more about Singapore`s double taxation conventions. A DBA is a contract between two jurisdictions that try to avoid double taxation. A DBA clearly defines the tax administration of each country of law. It also specifies when and how the tax is collected by the country of origin and the state of residence. However, one of the most important things that are defined in the DBA is that of one of the legal systems for providing tax credits or tax exemptions. It is therefore unlikely that a Singapore-based company will ever be subject to double taxation. This is an important reason to set up your business in Singapore. Double taxation can be avoided if foreign income is exempt from national tax. The exemption may be granted for all or part of the foreign income. Tax exemption for dividends from foreign sources, revenues from branches and services – Section 13 (8) of the Singapore Income Tax Act A Singapore resident company may benefit from a tax exemption for foreign dividends, foreign branch profits and income from foreign branches transferred to Singapore if the following conditions are met: Other information on the Singapore-Germany agreement to avoid double taxation and avoid tax evasion income.