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Double Tax Treaty

Overview

DTA is a bilateral agreement or multi-countries treaties between countries to eliminate an individual or company to have the same item of income taxed twice called double taxation.

Double Taxation arises due to taxation laws of the two relevant countries could be such as: – Residence, domicile or nationality of the taxpayer or company – Income, which could be real or deemed income – Property, its location, character and sometimes its source – Differing tax policies of each relevant jurisdiction.

Double Tax Treaty

Frequent Asked Questions:

1)What is the procedure of taxing a company(both foreign and local) in Singapore?

Answer:

A company, regardless of whether it is a local or a foreign company, will be taxed on its:

  • income accruing in or derived from Singapore; or
  • income received in Singapore from outside Singapore

2)What is an Avoidance of Double Tax Agreement?

Answer:

An Avoidance of Double Taxation Agreement (DTA) is an agreement signed between Singapore and another country (a treaty country) which serves to relieve double taxation of income that is earned in one country by a resident of the other country.

It makes clear the taxing rights between Singapore and her treaty partner on the different types of income arising from cross-border economic activities between the two countries.

The DTA also provides for reduction or exemption of tax on certain types of income.

Only Singapore tax residents and tax residents of the treaty country can enjoy the benefits of a DTA. To find out who are our treaty partners, please refer to the List of Avoidance of Double Tax Agreements.

3)Claiming Double Tax Relief – What is double tax relief (DTR)?

Answer:

Foreign income earned by a Singapore company may be subjected to taxation twice. Once in the foreign country, and a second time when the foreign income is remitted into Singapore.

A double tax relief (DTR) is the credit relief provided for under an Avoidance of Double Taxation Agreement (DTA) to reduce this double taxation. A DTR is granted by allowing the Singapore tax resident company to claim a credit for the amount of tax paid in the foreign country against the Singapore tax that is payable on the same income.

A company is a tax resident of Singapore if the control and management of its business is exercised in Singapore.

4)Why do I need a COR?

Answer:

You need a COR to enjoy the benefits under the DTAs that Singapore has concluded with other treaty countries.

When your company derives income from a foreign person or company, you may be subject to taxes in that foreign country. However, if the foreign country has concluded a DTA with Singapore, the DTA may allow Singapore tax residents to enjoy a reduced tax rate or an exemption of tax on the income in that foreign country.

To enjoy this benefit, you have to submit a COR to the foreign tax authority to prove that your company is a Singapore tax resident.

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Let us assist you today. For more information about Paul Hype Page & Co. professional company incorporation services, click here


Paul Hype Page & Co. is an ACRA-certified business adviser. Our team of seasoned professional can help you set up a company in Singapore very quickly and easily following all legal entities, and offer you sound advice on how to make it successful too.

In addition to business registration, we’ll also guide you how to:

  • Write a business plan – Learn how to write a compelling business plan by accessing our sample business plans, or other helpful market research information
  • Perform market research – Understand your business market, learn how it can enhance your business growth, and how to properly conduct a market research for your business
  • Legal issues for small business – If you are thinking about registration of company in Singapore, then you really need a lawyer. In addition, you will learn why legal counseling is very important part of any business.
  • Manage your finances – We’ll offer you the best resources and information to help you fully understand all financial concepts and teach you how to perform basic accounting tasks like budgeting, bookkeeping, financial analysis, among others.

To further aid you, we have provided here a resource area with industry specific information and other industry resources to help you successfully start and run your business.

  1. Singapore Business Opportunities 
  2. Singapore Business Licences
  3. Singapore Tax Planning
  4. Singapore Company Incorporation
  5. Singapore Company Yearly Statutory Requirements
  6. Singapore Working Visa Guide

By Eric Eio
Managing Partner of Paul Hype Page & Co.

Eric was awarded an ACCA graduate in 2000 and also graduated from University of Sydney with a Bachelor degree in Computer Science & Accounting. Since graduation, he had worked in Big 4 as an auditor , including a one year overseas stint with Ernst & Young, Shanghai in 2005. He left his last appointment as an Audit Managerial position with PricewaterhouseCoopers, Singapore in 2008 before setting up his own Certified Public Accountant Practice – Paul Hype Page & Co. His firm is being selected to be one of the advisory panel for Singapore top 500 SME.