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Singapore, Poland Sign Enhanced DTA

by Mary Swire,, Hong Kong

08 November 2012

On November 4, 2012, Singapore and Poland signed an enhanced double taxation agreement (DTA), which also incorporates the internationally-agreed standard for exchange of information for tax purposes.

The DTA was signed on the occasion of the visit to Singapore of Poland’s Prime Minister Donald Tusk, and it is hoped that the changes within the agreement will serve to enhance trade and investment flows between the two countries.

Applying to all taxes on income in both countries, the enhanced DTA provides lower withholding taxes for interest, dividend and royalty incomes, as well as more liberal permanent establishment rules compared with the existing agreement.

For example, the withholding tax on interest is to be capped at 5%, and on royalties at 2% if they relate to the use of any industrial, commercial or scientific equipment, and 5% in all other cases.

Withholding tax on dividend payments will also be capped at 5% if the beneficial owner is a company (other than a partnership) which controls directly at least 10% of the capital of the company paying the dividends (and has done so for an uninterrupted 24-month period), or 10% of the amount of the dividends in all other cases.

The revised DTA will enter into force after ratification by both countries.

TAGS: compliance | tax | investment | business | double tax agreement (DTA) | tax compliance | interest | royalties | Singapore | agreements | withholding tax | Poland | dividends

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