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The existing Avoidance of Double Taxation (DTA) between
Singapore and China, signed on 18 April 1986 and amended
by an Exchange of Notes signed on 29 July 1996, has
been in force since 12 December 1986. A new DTA between
Singapore and China has been signed on 11 July 2007
at the 4th Singapore-China Joint Council for Bilateral
Cooperation (JCBC) meeting held in Singapore. The main
improvements under the new DTA include the following:
- The rates of withholding tax on dividends and royalties
will be further reduced as follows:
- For dividends, the rates will be reduced from
the current 7% (for corporate shareholders holding
at least 25% of the share capital) and 12% (others)
to 5% and 10% respectively.
- For royalties, the rate on lease payment for
industrial, commercial or scientific equipment
will be reduced from the current 10% to 6%.
- Gains from the disposal of shares of Chinese companies
will be taxed in China only if the alienator of such
shares has held at least 25% of the share capital
of the company at any time during the 12 month period
before the date of the alienation.
2 The new DTA will continue to help investors avoid
the burden of double taxation of income between Singapore
and China, and further facilitate the cross-flow of
trade, investment, financial activities and technical
know-how between the two countries.
3 The new Agreement will enter into force after ratification
by both countries. The provisions of the new Agreement
will apply to income arising in the year after its entry
into force. Upon ratification of the new Agreement,
the provisions of the old Agreement signed on 18 April
1986 and amended by an Exchange of Notes signed on 29
July 1996 will cease to apply from then on.
4 The full text of the new DTA is available on the
website of the Inland Revenue Authority of Singapore
at www.iras.gov.sg.
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