Singapore – India Double Tax Treaty

Updated on Friday 31st March 2017

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In 2016, Singapore and India signed a Protocol bringing amendments to the existing double tax treaty between the two countries. Singapore is a state which signed numerous double tax agreements with different countries. These treaties emphasize the efficiency of the taxation system in Singapore.

As follows, our lawyers in Singapore would like to mention a few of the most important provisions of the Singapore – India double tax treaty.

Business income according to the Singapore – India Double Tax Treaty

In compliance with the Singapore – India double tax agreement, the income of a business is taxed only in the country where the business undertakes its activities. Therefore, if a company based in Singapore sets a permanent establishment in the other state, the income gained by this permanent establishment is taxed only in India.

If this double tax agreement had not been signed, the income of a business could have been taxed in both countries. This only proves how important the Singapore – India double tax agreement is and how it avoids the business income double taxation.

Other provisions of the Singapore – India Double Tax Treaty

According to the Singapore – India double tax treaty, the employment income is taxed as follows:

• A salary or remuneration paid as a form of employment is taxed only in the country where the receiver of the salary activated as an employee. Our law firm in Singapore can provide more details on this matter.

The above-mentioned double tax treaty also regulates the taxation of dividend income:

• Dividends which are paid by a legal entity that is a resident of one of the signing countries to a resident of the other state can be taxed in that state (the receiver’s residence country). There are, though, certain exceptions to this rule. Our lawyers in Singapore can provide more details on what these exceptions consist of.

As about the interest income taxation, the Singapore – India double tax treaty stipulates that:

• The interest resulting from one of the two signing states and which is paid to a resident of the other state could be taxed in the receiver’s state. In some cases, the interest income could be taxed in the source state, as well. We can provide more information on this subject.

If you would like to know more information on the provisions of the Singapore – India double tax treaty, please contact our Singapore lawyers.