Ratification of the Agreement between Singapore and Israel for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income
06 Dec 2005A new Agreement, which was signed on 19th May 2005 between the Government of the Republic of Singapore and the Government of the State of Israel for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income enters into force on 6 December 2005 following the completion of ratification formalities. The provisions of the new Agreement shall apply with effect from the Year of Assessment 2007.
2 Changes in economic circumstances and policies made it necessary to review the existing Agreement signed on 27th September 1971. The new Agreement retains a framework that encourages cross-border flow of trade, investment, technical know-how and expertise between Singapore and Israel thereby strengthening bilateral economic links between the 2 countries. The new Agreement spells out the taxing rights of each country on all forms of income and provides for the elimination of double taxation on income which may occur as a result of cross-border economic activities between the 2 countries.
3 Under the new Agreement, the source taxation on interest and royalties will be further reduced to 7% and 5% respectively. The other improvement in the DTA is that capital gains from disposal of shares will be tax exempt in the source state.
4 The full text of the new Agreement will be published in the Government Gazette and made available on the website of the Inland Revenue Authority of Singapore at www.iras.gov.sg on 6 December 2005.
Ministry of Finance