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Singapore: Domestic Corporate Taxation

Withholding Taxes on Incoming Dividends

An extensive network of double taxation treaties reduces the rate of withholding taxes levied on dividends remitted by the foreign subsidiary to the Singaporean holding company from the standard rate to a rate which stands at between 10%-15%. As of the beginning of 2013, Singapore had approximately 69 comprehensive double taxation treaties in place, and an additional 10 agreements that had been signed but not ratified. The greater a country's network of double taxation treaties the greater its leverage to reduce withholding taxes on incoming dividends. An elaborate network of double taxation treaties is thus a key factor in the ability of a territory to develop as an attractive holding company jurisdiction.

Although there is an agreement in place with the USA, the United States will not agree to grant tax-sparing credits to income remitted from a Singaporean subsidiary to a USA parent corporation, and accordingly the treaty signed between both countries only covers air and shipping matters, although a Free Trade Agreement signed between the two countries in 2003 removed tariff barriers in most cases.



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