Singapore-Russia Double Tax Treaty

Even if their trading relations have started a long time ago, Singapore and Russia have signed their first double taxation agreement in 2002 and enforced in 2009. However, last year the two countries have brought several amendments to the agreement in order to create better conditions for companies operating in both Singapore and Russia. The agreement covers the following taxes:

• -          the personal income tax applied to individuals and the tax on profits applied to companies in Russia;
• -          the income tax in Singapore.

Other similar levies and taxes are also subject to the Singapore-Russia double taxation convention.

Taxation under the Singapore-Russia double tax agreement

The agreement for avoidance of double taxation between Singapore and Russia applies based on tax residency. The amended treaty provides for two changes with respect to permanent establishments of Russian and Singapore companies. The first one refers to permanent establishments set up under the form construction sites, installations and offices with supervising activities which must kept for a minimum period of 12 months in order to benefit from this status. The second one to permanent establishment offering consulting services which must provide those services for more than 183 days within a calendar year in order to be deemed as such.

Our law firm in Singapore can provide you with more information on the permanent establishment status under the new double tax treaty with Russia.

Tax rates under the Singapore-Russia double tax convention

The treaty with Russia is Singapore’s 60 double tax agreement and provides for the following reduced tax rates:

• -          a 5% rate on dividends if the recipient owns at least 15% of the voting rights in the company paying the dividends;
• -          a 10% rate on dividends in all other cases;
• -          a 10% rate on dividends resulting from real estate investment funds;
• -          a 0% rate on interest payments;
• -          a 5% rate on royalties payments.

Avoidance of double taxation will be done through credit taxes in both Russia and in Singapore. The new double tax agreement between Singapore and Russia also contains a clause for the exchange of tax information.

For more information on the double taxation treaty with Russia, do not hesitate to contact our lawyers in Singapore.