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Singapore's Revised DTAs With Switzerland, Canada In Force

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

06 August 2012


The revised double tax agreement (DTA) between Singapore and Switzerland entered into force on August 1 while the protocol to the existing agreement between Singapore and Canada will enter into force on August 31, 2012.

The revised DTA between Singapore and Switzerland was signed on February 24, 2011, and replaces the previous agreement which dated back to 1975. It incorporates changes that, it is hoped, will further encourage and facilitate cross-border trade and investment between Singapore and Switzerland.

Amongst other provisions, the revised DTA includes the internationally-agreed Organization for Economic Cooperation and Development (OECD) standard for the exchange of information for tax purposes upon request. However, the DTA also contains the administrative assistance rules that were recommended in mid-February 2011 by the Swiss Federal Council, and which state that identifying the taxpayer and the holder of the information is the indispensable prerequisite for the granting of administrative assistance.

In addition, Switzerland and Singapore have agreed to lower withholding tax rates for dividends and interest. A withholding tax of 5% will be applicable on dividend payments from holdings of at least 10% in the capital of the company making the payment; or 15% in other cases.

In future, interest and royalty payments will be subject to a maximum withholding tax of 5%. Interest payments to the national banks of both countries in the agreement, as well as interest payments between banks in Switzerland and Singapore will in future be exempt from withholding tax.

The protocol to the existing DTA between Singapore and Canada was signed on November 29, 2011, and was specifically completed to incorporate the OECD information exchange standard. The new protocol applies to “taxes of every kind and description” imposed in either country.

The protocol gives the tax authorities of both countries a greater ability to exchange taxpayer information. It provides that neither tax authority can refuse to provide information solely because it does not require the information for its own domestic purposes, or because the information is held by a bank or similar institution.

TAGS: tax | business | tax information exchange agreement (TIEA) | double tax agreement (DTA) | royalties | law | Singapore | agreements | withholding tax | Canada | Switzerland | dividends

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