Singapore Ratifies New Tax Treaties

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

15 December 2006

The government of Singapore has announced that new double taxation avoidance agreements with Germany and Brunei have now come into effect.

This follows the completion of ratification formalities and exchange of ratification instruments between the governments concerned.

The new agreement with Germany came into effect on 12 December, and replaces the original treaty signed by both governments on 19 February 1972. The new agreement is necessary because of changes in economic circumstances and policies in both Singapore and Germany.

Under the new agreement, withholding tax rates on interest will be reduced to 8% from 10% and on royalties to 8% from domestic rates. The new agreement will cover income derived on or after 1 January 2007.

According to the Singapore government, the revised treaty will continue to help investors avoid the burden of double taxation of income flows between Singapore and Germany, and will further facilitate the cross-flow of trade, investment, financial activities and technical know-how between the two countries.

Meanwhile, Singapore's double tax avoidance agreement with Brunei, its 54th such agreement, came into effect on 16 December. It will apply to all types of income, also from 1 January, 2007.

Recommended