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(This note is not part of the Order)
The Agreement with the Republic of Singapore (which replaces the Agreement set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Singapore) Order 1967 (S.I. 1967/483) as amended by the Protocol set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Singapore) Order 1978 (S.I. 1978/787)) is set out in Part I of the Schedule to this Order.
The Agreement provides for business profits not arising through a permanent establishment to be taxed only in the country of the taxpayer’s residence. Profits attributable to a permanent establishment may be taxed in the country in which the permanent establishment is situated (Articles 5 and 7).
Income from immovable property and gains derived from the alienation of such property may be taxed in the country in which the property is situated (Articles 6 and 13).
International transport profits are generally to be taxed only in the country of residence of the operator (Article 8).
The Agreement includes rules for determining taxable profits when a company in one country is related to a company in the other country (Article 9).
The rate of tax imposed in the country of source on dividends derived by a resident of the other country shall not, in general, exceed 5 per cent. of the gross amount if the recipient is a company controlling at least 10 per cent. of the voting power in the company paying the dividends; and 15 per cent. of the gross amount of the dividends in all other cases (Article 10).
The rate of tax imposed in the country of source on interest derived by a resident of the other country is, in general, not to exceed 15 per cent. of the gross amount flowing to the other country, where the interest arises or accrues on or before 31st December 1999 and 10 per cent. in all other cases. Certain other interest (e.g. interest payable to the Government of the other country) is exempt from tax in the country of source (Article 11).
The rate of tax imposed in the source country on royalties is limited to 15 per cent. of the gross amount of the royalties where the royalties arise or accrue before 31st December 1999 and 10 per cent. of the gross amount of the royalties in all other cases (Article 12).
Gains arising from the disposal of movable property are normally to be taxed only in the country of the taxpayer’s residence. Gains arising from the disposal of assets of a permanent establishment or fixed base which the taxpayer has in the other country may be taxed in that other country (Article 13).
The earnings of temporary business visitors and some other individuals are, subject to certain conditions, only to be taxed in the country of the taxpayer’s residence (Articles 14 and .15). Fees received by a resident of one country in his capacity as a director of a company resident in the other country may be taxed in the latter country (Article 16). Income derived from the activities of artistes and sportsmen may be taxed in the country in which those activities are performed (Article 17). Occupational pensions (other than those paid in respect of Government service), payments made under the social security legislation of either country and annuities are to be taxed only in the recipient’s country of residence, provided that the recipient is subject to tax in that country on the income concerned (Article 18). Government service remuneration and pensions are normally taxable only by the paying Government (Article 19). Payments made to students and business or technical apprentices and the remuneration of teachers are, subject to certain conditions, to be exempt from tax in the country visited (Articles 20 and 21). Other income not specified in the Agreement remains taxable only in the recipient’s country of residence unless it arises in the other country (Article 22).
Where income continues to be taxable in both countries credit will be given in the taxpayer’s country of residence for tax imposed by the other country. The credit to be given in the United Kingdom for tax imposed in the Republic of Singapore includes, subject to time limits, credit for tax spared under certain provisions of Singapore law. In the case of dividends, the United Kingdom will give credit for the underlying tax paid in the Republic of Singapore where the shareholder is a United Kingdom company which controls at least 10 per cent. of the voting power in the company paying the dividends (Article 23).
There are provisions safeguarding nationals and enterprises of one country against discriminatory taxation in the other country (Article 25) and for consultation (Article 26) and exchanges of information (Article 27) between the taxation authorities of the two countries.
The Exchange of Notes set out in Part II of the Schedule contains agreements between the United Kingdom and the Republic of Singapore in relation to Articles 8, 17 and 18 of the Agreement.
The Agreement will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. The Agreement is to take effect in the United Kingdom on or after 1st April in respect of corporation tax and on or after 6th April for income tax and capital gains tax in the calendar year next following that in which it enters into force. The date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.
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