Singapore and India Amended the DTA

Updated on September 22,2017
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Singapore and India Amended the DTA

Singapore and India have signed a new Protocol to amend the existing Double Tax Treaty (DTA). The Protocol was signed following a meeting between Singapore’s High Commissioner to India and the Chairman of the Central Board of Direct Taxes, India. The two officials also discussed the bilateral ties between the two countries and the opportunities for future collaboration. Our accountants in Singapore can help you understand the provisions of this new amendment if you are an investor from India.

Changes to the taxation of capital gains

The Protocol to the existing double taxation agreement between India and Singapore will gradually reduce the capital gains exemption. However, the capital gains for shares acquired before April 1st, 2017 will remain in force. Those capital gains acquired after this date will be subject to a transition period of two years during which they will be subject to a tax of 50% of India’s current domestic rate for capital gains. Capital gains received after 31 March 2019 will be taxed in the State in which the company alienating he shares is a resident. The Protocol will only apply to those tax residents with significant economic activities.

The Protocol also makes an amendment for Associated Enterprises: the countries can discuss the elimination of double taxation for transfer pricing.

One of our experts can provide you with accounting services in Singapore, as needed if you are an investor from India looking to benefit from the provisions of the double tax treaty.

Singapore double tax agreements

Foreign investments in Singapore are facilitated through the existence of a large number of double tax treaties. These bilateral agreements prevent double taxation (in both jurisdictions) and encourage foreign investors to open a company in Singapore. Double tax treaties generally include a preferential withholding tax regime for capital gains, dividends, interest, royalties.

Singapore has signed more than 80 double tax treaties that are being updated as needed.

If you want to know more about the principles of accounting in Singapore and also about the applicable taxes, you can contact our experts.