Singapore and Nigeria signed a double tax treaty at the beginning of August. This is the first treaty of this type with Nigeria, and Singapore has already signed bilateral investment treaties with other African countries. If you are a foreign investor, an accountant in Singapore can give you comprehensive information about the tax treaties that apply in this jurisdiction.
The agreement for the avoidance of double taxation is useful for establishing a single point of taxation, for eliminating the current regime where income derived from one of the two locations was taxed in both jurisdictions. This, however, does not create opportunities for non-taxation or tax avoidance.
The double tax treaty (DTA) between Singapore and Nigeria applies on all taxes on income or elements of income. These include capital gains or income derived from movable or immovable property (rent, for example). For Nigeria, the taxes covered by the agreement also include the petroleum profits tax, the information technology levy and the tertiary education tax.
One of our accountants in Singapore can give you detailed information about the taxes for companies and individuals who derive various types of income from the city.
The Nigeria – Singapore DTA provides for a reduction of the withholding tax on dividends, interest, and royalties. While Singapore does not impose a withholding tax on dividends, the treaty applies to that imposed by Nigeria. The withholding tax on interest and royalties has a value of 7.5% under the treaty when the recipient is the beneficial owner of this type of income. An accountant in Singapore can tell you more about the withholding taxes and how they apply.
For the purpose of the treaty, the provisions apply concerning a permanent establishment in either of the two jurisdictions. This permanent establishment can be a company incorporated in Singapore or Nigeria, a building site, assembly, construction site, project or acidity that lasts more than six months.
You can contact the experts at our accounting firm in Singapore for more information on how the double tax treaty applies and how you can benefit from the reduced rates.