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Ratification Of The Agreement Between Singapore And Myanmar For The Avoidance Of Double Taxation And The Prevention Of Fiscal Evasion With Respect To Taxes On Income

An Agreement between the Government of the Republic of Singapore and the Government of the Union of Myanmar for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed in Yangon on 23 February 1999.

2 The Agreement enters into force today following the completion of ratification formalities. Its provisions shall have effect in Myanmar on income derived on or after 1 April 2000, and in Singapore on income assessable for the year of assessment 2002, ie. generally on income derived on or after 1 January 2001.

3 The main objective of the Agreement is to provide a framework to facilitate greater cross-flows of trade, investment, technical know-how and expertise between Singapore and Myanmar thereby strengthening bilateral economic links for the benefit of both countries.

4 Under the Agreement, the profits derived by an enterprise of one country from operating aircraft to the other country will be exempted from tax in that other country. The tax on profits derived from the operation of ships is reduced by 50%. The rate of withholding tax on interest will be reduced to 8% of the gross amount if it is received by a bank or financial institution, and to 10% of the gross amount in other cases. The rate of withholding tax on royalties will be reduced to 10% or 15% of the gross amount, depending on the types of royalties concerned.

5 At present, both countries do not impose tax on dividends in addition to the tax chargeable on the profits of a company. However, the Agreement specifies a limit to the tax rate applicable to dividends, should either or both countries impose such a dividend tax in future.

6 To provide relief from double taxation, Myanmar will allow tax paid in Singapore as a credit against Myanmar tax on income derived from Singapore. Similarly, Singapore will allow tax paid in Myanmar as a credit against Singapore tax on income derived from Myanmar. In the case of dividends received from Myanmar, the Myanmar tax on that portion of the profits out of which the dividends are paid will qualify for tax credit in Singapore if the shareholder is a company which is a resident of Singapore and which owns directly or indirectly at least 10% of the share capital of the dividend-paying company. Both countries also agreed to allow tax sparing credit to their residents. That is to say, where income tax has been relieved or reduced in one country by virtue of its tax incentives, the tax so relieved or reduced will be treated as if it has been paid and will therefore be allowed as a credit in the other country.

7 The full text of the Agreement is published in the Government Gazette today. With the coming into force of this Agreement, Singapore now has in force comprehensive Agreements with 40 countries. Further enquiries on the Agreement may be referred to Mr Tang Yam Soon of the Inland Revenue Authority of Singapore at Tel No. 3512119.

MINISTRY OF FINANCE

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Last Updated on December 04, 2017
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