Singapore/Lithuania Double Taxation Treaty Ratified

by Mary Swire, Tax-News.com, Hong Kong

30 June 2004

A double taxation avoidance agreement between Singapore and Lithuania came into effect on Monday, June 28, following the completion of the ratification process.

In general terms, the agreement aims to promote greater cross-flows of trade, investment, technical know-how and expertise between the two states and to strengthen bilateral economic ties.

More specifically it provides for the exemption or reduction of tax in the country of source on various types of income derived by residents of the other country, including shipping or aircraft in international traffic.

To eliminate double taxation, Lithuania will allow tax paid in Singapore as a credit against Lithuania tax on income arising in Singapore which will be reciprocated by the Singaporean authorities.

In the case of dividends received from the Baltic state, the Lithuania tax on that portion of the profits out of which the dividends are paid also qualifies for tax credit in Singapore, provided the Singapore firm owns at least 10% of the share capital of the Lithuanian company.

The provisions of the treaty are effective from January 1 2005.

Recommended