The treaty for the avoidance of double taxation
between Singapore and Australia
was first signed on 11th of February 1969. Since then, the two contracting states have signed a second protocol on the agreement on 8th of September 2009, which became effective since 22nd of December 2010. The agreement outlines the taxation system
applicable to tax residents
(natural persons and legal entities) in Australia and Singapore
. Australian investors
interested in opening a company in Singapore
can benefit of the provisions of agreement; our law firm in Singapore
can provide you with in-depth presentation of the double taxation treaty (DTA)
signed by the two states.
Main provisions of the Singapore – Australia DTA
The DTA covers the income tax in Singapore and in Australia the income tax and the petroleum resource rent tax applicable to offshore businesses, a provision imposed by the Australian federal law.
is considered a tax resident in Singapore
if the company was incorporated here and the administrative and management center is set up in the city-state
. A permanent establishment (PE)
is defined by the agreement as a place in which a company carries its operations, and it may refer to a branch, an office, a factory, a shop, a warehouse or a building site; a building site is considered a PE if the operations are carried out for more than 6 months within a year. Our lawyers in Singapore
can offer you more information on this subject.
Taxes under the Singapore – Australia DTA
• the income arising from a real estate property in Singapore is taxed in Singapore;
• the business profits are taxed in the country in which the company is a tax resident; if the company operates in a contracting state through a PE, then the company is also eligible for taxation in the contracting state;
• interest income arising in Singapore will be taxed in Singapore and, under the provisions of the treaty, it will be taxed at the reduced rate of 10% of the gross amount of the interest.
As a general rule, the royalty income is taxed under the same provisions applicable to interest income; our Singaporean lawyers can provide you with further details about the taxation of royalties.