Singapore-Thailand Double Tax Treaty

According to the latest statistics Singapore was one of the largest investors in Thailand since 2012 on. However, the two countries have had economic ties since the 1970ies when then signed their first double taxation agreement. In the last few years, Singapore has started updating all its double taxation treaties and the one with Thailand was amended in 2015. The new convention will become effective on January 1^st, 2017.

Our lawyers in Singapore can offer information on the current provisions of the double tax treaty with Thailand.

What are the changes brought to the Singapore-Thailand double tax treaty?

The new double taxation agreement between Singapore and Thailand provides for improved conditions for Thai and Singapore companies working in the other country. This means, the permanent establishment status has been reassessed in order to provide for a longer period of time for branch offices or subsidiaries or other types of facilities to engage in commercial activities on the other country’s territory. It is best to verify with a law firm in Singapore how permanent establishments are taxed under the new double tax treaty with Thailand.

The 2015 Singapore-Thailand double tax agreement also provides for reduced rates related to the taxation of dividends, interests and royalties.

Taxation under the 2015 Singapore-Thailand double tax agreement

The new treaty for the avoidance of double taxation between Singapore and Thailand provides for the following taxes:

• -          the income tax in Singapore;
• -          the income and the petroleum income taxes in Thailand.

The 2015 Singapore-Thailand double tax convention also specifies the following reduced rates:

• -          a 10% tax rate on dividend payments;
• -          a 0% rate on the interest payment if the beneficiary is a financial or an insurance company;
• -          a 10% rate on the interest if the payment is related to a credit;
• -          a 15% rate on all other interest payments;
• -          a 5% rate on royalties paid in relation with the use of copyrights;
• -          an 8% rate on royalties paid in relation with the use of trademarks, designs or patents;
• -          a 10% rate on all other royalties payments.

For full information on taxation in the city-state, please feel free to contact our attorneys in Singapore.