Press Releases

RATIFICATION OF THE AGREEMENT BETWEEN SINGAPORE AND TURKEY FOR THE AVOIDANCE OF DOUBLE TAXATION AND PREVENTION FO FISCAL EVASTION WITH RESPECT TO TAXES ON INCOME

An Agreement for the Avoidance of Double Taxation Agreement and Prevention of Fiscal Evasion with respect to Taxes on Income was signed between the Government of the Republic of Singapore and the Government of the Republic of Turkey on 9 July 1999. This Agreement enters into force today following the completion of the ratification formalities. The provisions of the Agreement shall have effect on income derived on or after 1 January 2002.

2 The Agreement provides a framework to facilitate greater cross-border flows of trade, investment, financial activities and technical know-how between Singapore and Turkey. It provides for the elimination of double taxation on income which occur as a result of cross-border economic activities between the 2 countries. The taxing rights of each country on all forms of income are also specified in the Agreement.

3 The Agreement provides for the exemption or reduction of tax in the country of source on various types of income derived by residents of the other country, including the exemption from tax in the country of source on profits derived from the operations of aircraft in international traffic and the reduction of source country tax on dividends, interest and royalties.

4 To provide relief from double taxation, Singapore will allow tax paid in Turkey as a credit against Singapore tax on income arising in Turkey. In the case of dividends received from Turkey, the Turkish tax on that portion of the profits out of which the dividends were paid would also qualify for tax credit in Singapore if the shareholder is a company owning at least 10% of the share capital of the company paying the dividends.

5 The full text of the Agreement is published in the Government Gazette today. With this Agreement coming into force, Singapore will now have in force comprehensive Avoidance of Double Taxation Agreements with 43 countries. Further inquiries regarding the Agreement may be directed to the Inland Revenue Authority of Singapore at telephone number 6351 2122.

MINISTRY OF FINANCE