Singapore – Belgium Double Taxation Treaty

Double taxation appears when two countries impose taxes on the income of the same taxpayer. The corporation or individual is taxed in the country of residence where the income is received, but also in the country where the income is produced. To avoid double taxation for the same income, most countries have signed double tax treaties and our law firm in Singapore can present to you the main provisions of the Singapore –Belgium treaty. If you represent a Belgium company that wants to enter the Singapore business market, you should know that Singapore – Belgium double taxation treaty offers convenient tax measures for companies in both countries. 

The first double taxation agreement (DTA) ratified between the two countries was signed in 1973. The Agreement was replaced in 2006 with a new Double Taxation Treaty, which entered into force in November 2008. Applied to the income received after 1st of January 2009, the new DTA offered to the relationship Singapore-Belgium lower taxes for trade and investments. 

Under the new DTA the permanent establishment period was modified. The precedent DTA stipulated that a permanent establishment (building site, construction or assembly project) was considered a settlement which functioned for at least 6 months; under the new law, a site has to last a minimum of 12 months to constitute a permanent establishment. 

 

The withholding tax on interest and on lease payments has also been modified, offering better conditions for foreign investors. The withholding tax on interested was lowered from 10% to 5% and the rate for lease payments on industrial, commercial and scientific equipment was modified from 5% to 3%. If you need to find out more on the new tax system, our lawyers in Singapore can provide you with the legal background. 

 

Dividends received by the shareholders who own at least 25% of the share capital in the company paying the dividends are exempted of withholding tax, while for the shareholders holding 10% of the share capital the withholding tax rate applicable is 5%; for the others shareholders the applicable rate is 15%. Our law firm in Singapore can offer you a detailed presentation on the new taxes applied under the new Singapore- Belgium DTA. 

 

For more information about Singapore- Belgium double taxation treaty, you can contact our attorneys in Singapore, who can offer you consultation on this matter.