Unilateral unilateral tax credits (TUCs) can be used in countries with which Singapore does not have a DBA. The utc is entitled to the foreign tax paid by Singapore residents on the following types of income from that foreigner if such income is repatriated to Singapore: A person: a person who resides in Singapore in the year preceding the tax year, with the exception of temporary absences that may be reasonable and which are not eligible for that person the fact of being established in Singapore is incompatible. and includes a person who is physically or employed (except as a business manager) in Singapore for 183 days or more in the year prior to the evaluation year; and the development of international trade and multinationals has increased the need to address the issue of double taxation. As a company or individual looking for business opportunities and investments beyond your own country, you would of course deal with the problem of taxation, especially if you will have to pay twice taxes on the same income in the host country and in your country of origin. As a result, you are trying to structure your operations to optimize your tax position and reduce costs that, in turn, would increase your global competitiveness. It is the relevance of the DBA or Singapore`s tax treaties that comes into play. Charges In the absence of the contract, the withholding tax rate in Singapore is 10% for all royalties paid to non-residents, while in India, the withholding rate for all royalties paid to non-residents is 10% plus surcharge and discount. According to the DBA, the royalty tax rate is 10-15%, depending on the type of royalties paid to non-residents. Interest Excluding the contract, the withholding tax rate in Singapore for all interest paid to non-residents is 15%, while in India the rate is between 5 and 20% (depending on the type of interest) plus the surcharge and discount. After the DBA, the interest tax is as follows: If you or your company meets the residence requirements mentioned above, you can use the provisions of a Singapore DTA with Singapore as a state of residence.
Note that even if there is no DBA between Singapore and another country with which you do business, you may still be able to avoid double taxation by using Singapore`s unilateral tax credits for Singapore residents. The enhanced DBA agreement allows Singapore and Indonesian companies to benefit from a lower withholding tax on royalties. A Singapore resident can avoid double taxation even without ADB with a given country. This is because Singapore`s domestic legislation (as explained above) exempts from foreign countries most types of income from foreign sources (including dividends, foreign branch profits and outsourcing revenues) that were collected in Singapore on June 1, 2003 or after June 1, 2003, if certain conditions are met. These conditions are summarized: 2. When a company in a contracting state, when operating in the other contracting state through a designated institution, exercises in that contracting state the profits it must expect when it is a self-sustaining and autonomous enterprise carrying out the same or similar activities under identical or similar conditions, and which is totally independent and totally independent. with the company it is located in.