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

22 Oct 2004

An Agreement between the Government of the Republic of Singapore and the Government of Mongolia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income enters into force today following the completion of ratification process. Its provisions shall have effect on income derived on or after 1 January 2005.

2 The Agreement aims to facilitate greater cross-flows of trade, investment, technical know-how and expertise between Singapore and Mongolia so as to strengthen bilateral economic links for the benefit of both countries. Through the provisions of the Agreement, double taxation, which may arise from the cross-border transactions between the two countries, will be eliminated. 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 ships or aircraft in international traffic.

4 To eliminate double taxation, Mongolia will allow tax paid in Singapore as a credit against Mongolian tax on income arising in Singapore. Singapore will do likewise. In the case of dividends received from Mongolia, the Mongolian tax on that portion of the profits out of which the dividends are paid also qualifies for tax credit in Singapore if the Singapore company owns at least 25% of the share capital of the Mongolian company.

5 With the coming into force of this Agreement, Singapore now has in force Double Taxation Agreements with 49 countries. The full text of the Agreement is published in the Government Gazette today. The full text of the Agreement is also available on the Inland Revenue Authority of Singapore's (IRAS) website at