Press Releases

An Agreement between the Government of the Republic of Singapore and the Government of the Republic of Cyprus for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income was signed on 24 Nov 2000. This Agreement enters into force today following the completion of ratification formalities. Its provisions shall have effect on income derived on or after 1 January 2002.

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

3 Under the Agreement, dividends arising in Cyprus and received by a resident of Singapore will not be subject to any tax in Cyprus beyond the tax on the profits or income of the company paying the dividends. For interest and royalties, the withholding tax rates of tax are reduced in the country of source as follows:

Interest : 7% (if the beneficial owner is a bank or financial institution); 10% (others)
Royalties : 10%

4 The Agreement also provides for full exemption of profits derived from the operation of ships and aircraft in international traffic in the country of source.

5 To provide relief from double taxation, Singapore will allow tax paid in Cyprus as a credit against Singapore tax on income arising in Cyprus. In the case of dividends received from Cyprus, the Cyprus tax on that portion of the profits out of which the dividends have beenare paid will also qualifyies for tax credit in Singapore if the shareholder is a company resident in Singapore owning at least 10% of the share capital of the company paying the dividends.

6 The full text of the Agreement is published in the Government Gazette today. With the coming into force of this Agreement, Singapore will now have in force comprehensive Avoidance of Double Taxation Agreements with 41 countries. Further enquiries on the Agreement may be referred to the Inland Revenue Authority of Singapore at Tel : 6351 2122.

MINISTRY OF FINANCE