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A double tax agreement (DTA) is a treaty between Singapore and another country that relieves double taxation of the same income. For a company, the practical result is lower tax abroad on income it earns there, such as royalties. IRAS says Singapore has signed DTAs, limited DTAs and exchange of information arrangements with around 100 jurisdictions. Checked .
What does a treaty actually change?
Singapore tax residents can use three kinds of relief on foreign income: exemption or reduction of tax on specified foreign income from a DTA country, exemption of specified foreign dividends, branch profits and service income, and a foreign tax credit. A treaty also sets maximum rates on payments such as dividends, interest and royalties in the source country. The rate you pay depends on the text of the treaty with that country.
IRAS's own example: a Singapore company receives royalties from an Australian tax resident. Australia would withhold 30%. With a Certificate of Residence, the rate under the Singapore-Australia agreement is 10%.
How do you check a country?
Use the IRAS list of DTAs, limited DTAs and EOI arrangements. Each entry links to the treaty PDF. The list has three filters:
- In force. Agreements that are signed but not ratified do not have the force of law.
- Modified by the MLI, the multilateral convention that updates treaties against base erosion.
- Contains an arbitration provision.
Some examples from the IRAS list, as we read it:
| Country | What IRAS lists |
|---|---|
| United Kingdom | Full DTA, in force, modified by the MLI, with arbitration |
| Australia | Full DTA, in force, modified by the MLI, with arbitration |
| India | Full DTA, in force, modified by the MLI, no arbitration |
| Japan | Full DTA, in force, modified by the MLI, with arbitration |
| United States | No full DTA. A limited DTA and an exchange of information arrangement, both in force |
| Hong Kong | Limited DTA, in force, not modified by the MLI |
Treaty caps on dividends differ by country. Dividend tax in the source country is capped at 5% under the French, Swiss and UAE agreements, at 10% under the German agreement for qualifying holdings, and at 15% under the Netherlands agreement, subject to each treaty's holding tests. These come from the treaty texts on IRAS. Read the article of the treaty with your country and the date from which it applies. For the country pages on this site, see register a company from India and register a company from the UK.
Who can claim?
The company must be a Singapore tax resident. Foreign-owned investment holding companies, nominee companies and non-Singapore incorporated companies generally cannot get a Certificate of Residence. Some DTAs have limitation of relief provisions, which add a condition: the company must remit the foreign income that is taxable in Singapore on a remittance basis. Read tax residency for how IRAS decides the status.
How do you claim treaty benefits?
- Confirm the company is a Singapore tax resident for the year.
- Apply for a Certificate of Residence on mytax.iras.gov.sg. IRAS processes it within 7 working days. A digital copy can be printed with no fee.
- Apply before you claim the benefit, or at the latest within 2 calendar years of the actual or expected receipt of the income.
- Give the COR to the foreign tax authority or the foreign payer, as that country requires.
If the company is not claiming a treaty benefit but wants a letter that it is a resident, IRAS offers a Letter of Residence application.
What about payments you make abroad?
A treaty may lower or remove the withholding rate on what you pay a non-resident. You still must file the withholding tax return by the deadline, even where the payment is exempt under the DTA. See withholding tax.
Is a treaty a reason to incorporate in Singapore?
It can be one factor. It is not enough on its own, because residency, substance and the treaty text decide the result. Compare Singapore with other locations on Singapore vs Hong Kong, and check your own country's rules on foreign income. A tax adviser who knows both countries is worth the fee.
Sources
- List of DTAs, limited DTAs and EOI arrangements from IRAS, used for the count, the filters and the country entries.
- Applying for a Certificate of Residence from IRAS, used for the claim steps, 7 working days and the Australia example.
- Companies receiving foreign income from IRAS, used for the three kinds of relief.
- Withholding tax filing and payment due date from IRAS, used for the S45 duty under a DTA.
- Treaty texts for France, Switzerland, the UAE, Germany and the Netherlands from IRAS, used for the dividend caps.
