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Singapore-Canada Double Tax Treaty

Updated on Tuesday 17th May 2016

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Singapore-Canada-double-tax-treatySingapore signed its first double tax agreement with Canada in 1976. In order to increase economic cooperation and provide for new advantageous tax conditions to Canadian and Singapore companies, the two states amended their convention in 2011 and enforced in 2012. The following taxes are covered by the Singapore-Canada double taxation treaty:

  • -          the income tax in Singapore;
  • -          the income tax in Canada.

The agreement clarifies that the income tax is made up of several elements in the case of both contracting states. Our company formation agents in Singapore can provide you with more information about the elements of income comprised in the double tax agreement with Canada.

Tax rates under the Singapore-Canada double taxation treaty

As all other Singapore double taxation agreements, the one with Canada provides for a series of facilities resulting in tax reductions or exemptions for certain incomes. The Singapore-Canada double taxation convention provides for the following rates:

  • -          a 15% tax rate on dividend payments, if the recipient owns shares in the company paying the dividends;
  • -          a 15% tax rate on interest payments, if the interest is taxed in the other country.
  • -          a 15% tax rate on royalties payments, if the royalties are taxed in the other country.

In order to avoid double taxation, both Canada and Singapore will grant an allowance against the tax paid in the other contracting state.

Taxation under the Singapore-Canada double taxation agreement

The double tax convention between Singapore and Canada covers both individual and companies residing in one of the contracting states. The agreement also stipulates that any tax falling under its incidence may be levied in one of the two states. Exceptions from this rule apply in the taxation of income derived from the alienation of real estate will be taxed in the country where the property is situated in and in the case of employment income which will be taxed in the country where the services are rendered. However, a Canadian or Singapore tax resident will be taxed in the other country if they have lived there for at least 183 days in a calendar year.

For complete information about taxation under the agreement with Canada, do not hesitate to contact our Singapore consultants.

 

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