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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 of between 10%-15%. In early 2018, Singapore had approximately 84 comprehensive double taxation treaties in place, and an additional 4 agreements that had been signed but not ratified. The greater a country's network of double taxation treaties the greater its ability to reduce withholding tax on incoming dividends. An elaborate network of double taxation treaties is hence a key factor in the ability of a territory to develop as an attractive holding company jurisdiction.

Although the USA has an agreement in place with Singapore, it will not agree to grant tax-sparing credits to income remitted from a Singaporean subsidiary to a USA parent corporation. 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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