Singapore – China Double Tax Treaty

Updated on November 7,2016
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Singapore – China Double Tax Treaty
An agreement for the avoidance of double taxation is in place between Singapore and China. Businesses that venture from one country to the other benefit from the provisions of this treaty in terms of reduced withholding tax rates and a single taxation point for profits derived in one of the locations.

The treaty also serves as an instrument for enforcing anti-fiscal evasion practices. An accountant in Singapore can help you if you are a foreign investor from China looking to expand a business here. With the help of an expert, you will be able to use the tax benefits provided in the double tax treaty.

Taxes covered by the double tax treaty

The double tax treaty between Singapore and China (DTA) applies to individuals and/or companies that are residents of one or both countries. In the case of China, the treaty applies to the individual income tax and the corporate income tax.

In Singapore, the double tax treaty applies to the income tax, but also to any other taxes that are identical to or similar and are imposed after the signature date of the treaty (also applicable to China). 

According to the agreement, both countries must notify one another of any relevant changes in their taxation policies. The treaty applies to those income taxes imposed by both states, irrespective of the manner in which they are levied.

 Benefits for investors under the Singapore – China DTA

The withholding tax rates are reduced under the double tax treaty between Singapore and China. The dividend rate is reduced to 5% from the applicable rate for those companies owning at least 25% of the share capital of the company making the dividend payment. The withholding tax on royalties is also reduced, from 10% to 6%.

An accountant in Singapore can help you with detailed information about the reduced withholding tax rates on dividends and royalties.

The double tax treaty applies to income derived from a number of sources, including that from immovable property, business profits, director’s fees and certain special profits.

You can contact our experts if you are in need of accounting services in Singapore.