signed a treaty
for the avoidance of double taxation
on 7th of September 1999; the treaty
became effective from 1st of January 2001. The agreement
has been amended on 28th of May 2012 and the modified provisions became effective starting with 26th of December 2013. Portuguese investors
interested in setting up a company in Singapore
may benefit of the provisions of the agreemen
t; our lawyers in Singapore
can provide you with a detailed presentation on the latest protocol signed by the two contracting states.
Main provisions of the Singapore – Portugal double tax treaty
The agreement covers the tax on income, where income refers to the total or to parts of the income, such as taxation of gains from immovable or movable property or the tax applicable on the salaries paid by a company to its employees. The treaty stipulates that Portugal and Singapore will apply the tax on income on identical or similar taxes, as stated by the local legislation of each contracting state.
Taxes covered by the Singapore – Portugal double tax treaty (DTA) are the following:
• the income tax – applicable in the case of Singapore;
• the personal income tax;
• the corporate income tax;
• the local surtax on corporate income tax.
The last three taxes are applied on the territory of Portugal, under the Portuguese legislation.
According to the agreement
, a person or a company is considered a resident
in one of the contracting states as long as he or she is a tax resident
in that state. A tax resident
is a person who is liable to pay taxes
in one of the states for reasons such as residency, domicile or place of management and other legal means by which a person is subjected to taxation; our law firm in Singapore
can provide you with a detailed presentation on this subject.
Taxation of income under the Singapore – Portugal DTA
Persons interested in setting up a company in Singapore
should know that the Singapore – Portugal DTA
stipulates that the following incomes are subjected to taxation:
• income from immovable property;
• business profits;
• air transportation;
• dividends (usually taxed at a rate of maximum 10% of the gross amounts of the dividends);
• interest (taxed at a rate of 10% of the gross amount of the interest);
• royalties (taxed at a rate of maximum 10% of the gross amount);
• capital gains.