Press Releases

Singapore's agreement with Estonia for the avoidance of double taxation comes into effect on 27 December 2007. The agreement will specify clearly the taxing rights of each country on all types of income earned from 1 January 2008.

2. The agreement was signed last year at the sidelines of the IMF-World Bank Annual Meetings held in Singapore. The agreement aims to promote greater bilateral flows of investment, trade, technical know-how and expertise between Singapore and Estonia and thus strengthen economic links. With Singapore-based businesses and Singaporeans venturing overseas into the Baltic region, the same income may be subject to tax both in Singapore and Estonia. This agreement will alleviate any double taxation that may arise from such transactions between the two countries. Singapore has also concluded agreements for the avoidance of double taxation with the other Baltic States, namely Latvia and Lithuania.

3. The terms of the agreement include a reduced withholding tax rate of 5% (for corporate shareholders holding at least 25% of the share capital) and 10% (for other shareholders) on dividends. In addition, the withholding tax rate on interest and royalties will be reduced to 10% and 7.5% respectively.

4. With this latest agreement, Singapore now has in force comprehensive tax treaties with 57 countries. The full text of the agreement will be published in the Government Gazette on 27 December 2007, and will also be available on the Inland Revenue Authority of Singapore's (IRAS) website at www.iras.gov.sg.

MINISTRY OF FINANCE