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Liechtenstein, Singapore Double Tax Pact In Force

by Mary Swire, Lowtax.net, Hong Kong
28 July, 2014

The double taxation agreement (DTA) between Singapore and Liechtenstein, which was signed on June 27 last year, entered into force on July 25, 2014, after the completion of domestic ratification procedures by both territories.

The agreement allocates taxing rights with regard to business income, income from shipping and air transportation, and provides for tax relief on different types of passive income.

For example, the agreement provides for a zero withholding tax rate at source on dividends, and caps withholding tax on interest at 12 percent and on royalties at 8 percent, if the beneficial owner of that income is a resident of the other state.

The DTA also incorporates the latest internationally-agreed standard on the exchange of information relating to tax matters. It obliges each tax authority to provide information even if it does not require the information itself, and even if the information is held by a bank or other financial institution.

However, the two jurisdictions have also signed a protocol to the agreement, which specifies the detailed information necessary to be attached to any specific request for information, together with a confirmation that the terms of the DTA will not require either jurisdiction to exchange information on a spontaneous or automatic basis.

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