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Singapore UAE Double Taxation Treaty

Singapore-UAE Double Taxation Treaty

Updated on Friday 18th September 2015

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Singapore-UAE-Double-Taxation-TreatySingapore-UAE double taxation agreement

Singapore and the United Arab Emirates have entered into a double taxation agreement in 1989. The agreement was enforced in both countries in 1991. The agreement was designed as a convention for reciprocal exemption of taxes on the business and air transport income arising in Singapore and the UAE. The agreement covers both UAE and Singapore companies and residents. The agreement covers the income tax in both Singapore and the UAE.

With respect to the air transport tax, the double taxation agreement between Singapore and the UAE defines the term “operation of aircraft” as the transportation of passengers, luggage and other goods. All air transport private and public companies in Singapore and the UAE are covered by the double tax agreement.

Tax exemptions according to the Singapore-UAE double tax treaty

Unlike other double taxation agreements Singapore concluded, the convention with the United Arab Emirates refers to the avoidance of double taxation as exemptions. Article 3 in the convention stipulates that income and profits arising from the operation of aircrafts in international traffic or from any movable property will be exempt from taxation in the other state. UAE and Singapore companies making profits from the alienation of aircraft and other related equipment will be exempt from taxation in the other state.

The Singapore-UAE double taxation treaty also stipulates that in case one of the countries has taxed a company covered by the treaty, the state will refund the tax upon the submission of an application with the competent authority within 6 months.

Other taxes covered by the Singapore-UAE double taxation treaty

The agreement also covers other taxes that are levied in both Singapore and the United Arab Emirates, among which:

  • - dividends,
  • - interests,
  • - royalties,
  • - employment wages,
  • - directors’ fees.

The convention establishes that dividends, interests and royalties may be taxed in Singapore or the UAE, while employment income will be taxed in the country where the services are rendered. The Singapore-UAE double taxation convention also covers taxes arising from pensions and governmental services. For complete information about the provisions of the double tax agreement with the UAE you may contact our law firm in Singapore.

 

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