The Government of the Republic of Singapore and the Government of the People’s Republic of China have entered into an agreement to avoid double taxation and to prevent fiscal evasion. This Agreement shall apply to persons who are residents of one or both of the Contracting States.
The Agreement would apply to taxes on income imposed on behalf of a Contracting State or its local authorities, irrespective of the manner in which they are levied.
The existing taxes to which the Agreement shall apply are in particular:
In China:
(i) The Individual Income Tax
(ii) The Enterprise Income Tax
In Singapore:
- The Income Tax
The term "competent authority" means:
- In the case of China, the State Administration of Taxation or its authorized representative; and
- In the case of Singapore, the Minister for Finance or his authorized representative;
The term "national" means:
- Any individual possessing the nationality of a Contracting State;
- Any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.
Resident
The term "resident of a Contracting State" means any person who under the laws of that State, is liable to tax therein by reason by reason of his domicile, residence, place of management, place of head office, place of incorporation or any other criterion of a similar nature, and also includes that State, a local authority or statutory body thereof.
Business Profits
The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
Dividends
- Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
- However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
- 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;
- 10 per cent of the gross amount of the dividends in all other cases.
- The term "dividends" as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
Interest
- Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
- However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed:
- 7 per cent of the gross amount of the interest if it is received by any bank or financial institution.
- 10 per cent of the gross amount of the interest in all other cases.
Termination
In China:
In respect of income derived during the taxable years beginning on or after the first day of January in the calendar year next following that in which the notice of termination is given.
In Singapore:
In respect of tax chargeable for any year of assessment beginning on or after 1 January in the second calendar year following the year in which the notice is given.
In respect of tax chargeable for any year of assessment beginning on or after 1 January in the second calendar year following the year in which the notice is given.
