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Seychelles-Singapore DTA Operational

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

07 January 2016

A double tax agreement between the Seychelles and Singapore became effective on January 1, 2016, establishing a beneficial framework to encourage cross-border investment and trade.

The agreement, which entered into force on December 18, 2015, after being signed in July 2014, provides, on certain conditions, that cross-border dividends income will be exempt from tax at source.

It also caps tax on interest income in the source country at 12 percent, providing that the recipient is the beneficial owner of the interest income and resident in the other contracting state. In some circumstances interest income will exempt from tax at source.

Withholding tax on royalties income at source will be capped at eight percent or such income will be exempt.

The treaty's provisions on the creation of a permanent establishment provide that a building site; a construction, assembly, or installation project; or supervisory activities in connection therewith will be deemed to be a permanent establishment if the project or activities last more than 12 months.

In respect of services, including consultancy services, a permanent establishment will be created if the activities (for the same or a connected project) last for a period of more than 365 days in any 15-month period.

The text of the agreement is available online, on the Singaporean tax authority's website.

TAGS: tax | investment | interest | royalties | Singapore | tax authority | dividends | construction | trade | Seychelles | services

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