Singapore’s International Tax Cooperation

Singapore - Russia 

Singapore and Russia signed a Protocol on 17 November 2015 to amend the existing Double Taxation Agreement (“DTA”) which is expected to enhance trade and investment flows between the two countries. The Protocol was signed in Moscow between Singapore’s Ambassador to the Russian Federation, Ms Kim Keng Hua and Russian Deputy Minister of Finance, Mr Sergey Shatalov.

Amongst other changes, the Protocol lengthens the threshold period for determining the presence of permanent establishment and lowers the withholding tax rates for dividends, interest and royalties. The Protocol will enter into force after its ratification by both counties. 

Singapore - Ecuador, San Marino and Seychelles 

Singapore’s bilateral agreements with Ecuador, San Marino and Seychelles for the avoidance of DTA entered into force on 18 December 2015. The DTAs provide clarity on tax matters and eliminate double taxation in relation to cross-border transactions. 

Singapore - Luxembourg 

Singapore’s revised bilateral agreement with Luxembourg entered into force on 28 December 2015, which lowers the withholding tax rates for dividends, interest and royalties, lengthens the period test for determining permanent establishments as well as provides a more mutually favorable tax treatment for international air transport and shipping income, amongst other changes. 

These changes are expected to enhance trade and investment flows between Singapore and the respective contracting jurisdictions. 

Singapore-US Foreign Account Tax Compliance Act (“FATCA”) 

The FATCA is a US law that requires all foreign financial institutions worldwide to regularly submit information on financial accounts held by US persons to the US internal Revenue Service, or face a 30% withholding tax on certain gross payments received from the US. 

In year 2014, the Ministry of Finance (“MOF”), the Inland Revenue Authority of Singapore (“IRAS”) and the Monetary Authority of Singapore (“MAS”) held a public consultation on the FATCA Regulations, as well as Guidance which elaborates on the obligations of reporting Singaporean Financial Institutions (“SGFI”) under Singapore-US Inter-governmental Agreement (“IGA”). 

Singapore has concluded a FATCA Model 1 IGA and Regulations with the US, which entered into force on 18 March 2015. A latest comprehensive agreement and Regulations was published publicly by Inland Revenue Authority of Singapore on 17 November 2015. 

A reporting SGFI is required to submit an annual return to IRAS setting out the required information in relation to every US reportable account via the International Data Exchange Service (“IDES”). If a Reporting SGFI that does not maintain any US Reportable Account, a NIL return is also required to provide either by preparing a FATCA reporting packet and transmitting it through the IDES or completing a paper FATCA NIL Return and mailing it to IRAS. 

Transmitting this information through IRAS helps to ease the compliance burden for Singapore financial institutions as their reporting obligations would be deemed met once they transmitted the information to IRAS.

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