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Singapore-UK Double Tax Treaty

Singapore-UK Double Tax Treaty

The double tax convention between Singapore and the UK

Singapore and the United Kingdom signed their first double taxation treaty in 1966 and enforced it in 1975. Ever since, the agreement was renewed several times and the last amendment was brought in 2012. The effective date of the treaty is January 1st, 2013. UK businessmen who intend to open a company in Singapore, should know that the Singapore-UK double tax agreement covers private individuals and companies residents of one or both contracting parties and applies to the following taxes:

The agreement also provides for similar taxes in the UK and Singapore.

What are the taxes covered by the Singapore-UK double tax agreement?

The income tax refers to different elements composing it which is why the articles of the double taxation convention provides for each type of them and specifies where the tax will be levied. First of all, the Singapore-UK double taxation treaty applies based on tax residency which is why most taxes will be levied in the country where the payer is registered for taxation purposes. Exception to these provisions are permanent establishments and associated enterprises which will be taxed in the country where the income arises. Income for immovable property, such as real estate, can also be taxed in the country where it is located. Other incomes covered by the double tax agreement between Singapore and the UK are:

  • business profits;
  • – shipping and air transportation;
  • – dependent and independent services;
  • – dividend payments;
  • – interest payments;
  • – royalties payments;
  • – governmental services;
  • – directors’ fees.

Our specialists in company formation can provide you with the full list of incomes governed by the treaty with the UK and can also explain how the avoidance of double taxation will occur. They can also help UK investors open a company in Singapore.

Reduced tax rates under the Singapore-UK double taxation treaty

The following reduced tax rates apply under Singapore’s double tax treaty with the United Kingdom:

  • – a 5% rate on dividends if the recipient owns at least 10% of the voting shares in the company making the payments and 15% in all other cases;
  • – a 15% rate on interest if they arose before December 1999 and 10% in all other cases;
  • – a 15% on royalties if they arose before December 1999 and 10% in all other cases.

For complete information on the double tax treaty with the UK, do not hesitate to contact our specialists in opening companies in Singapore.