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Ratification Of The Agreement Between The Government Of The Republic Of Singapore And The Government Of The Sultanate Of Oman For The Avoidance Of Double Taxation Of Income Derived From International Air Transport

14 Jan 2000

An Agreement between the Government of the Republic of Singapore and the Government of the Sultanate of Oman for the avoidance of double taxation of income derived from international air transport was signed in Singapore on 29 June 1998. This Agreement enters into force today following the completion of ratification formalities.

2. The Agreement provides for income derived from the operation of aircraft to Oman by Singapore air transport enterprises to be exempted from Omani tax. Similarly, income derived from the operation of aircraft to Singapore by Omani air transport enterprises are exempted from Singapore tax.

3. Under the Agreement, the reciprocal exemption also applies to :
(a) gains from the sale of aircraft, spares and equipment used for the operation of aircraft in international traffic;
(b) interest derived from deposits with banks where the deposits are from funds directly connected with the operation of aircraft in international traffic; and,
(c) income and profits derived from training schemes, management and other services rendered to an air transport enterprise of the other country;

4. In addition, the Agreement provides for reciprocal exemption from tax on remuneration of air crew employed aboard aircraft operated by Singapore or Omani air transport enterprises.

5. Air transport enterprises of both countries would benefit from the Agreement, which will enhance economic ties and bring benefits to both economies.

6. The Agreement has retroactive effect for income derived on or after 1 January 1971. This provision ensures that the air transport enterprises of both countries will not be subject to any reactive assessment.

7. The exemption from Singapore tax provided under the Agreement does not apply to profits derived by Gulf Air in which the Sultanate of Oman holds a stake. It will commence to apply only when all of Gulf Air?s shareholders have each entered into a reciprocal exemption agreement with Singapore.

8. The full text of the Agreement is contained in the Government Gazette published today. Further enquiries regarding the Agreement can be referred to the Inland Revenue Authority of Singapore.