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Singapore and New Zealand Sign Avoidance of Double Taxation Agreement

21 Aug 2009

The Government of the Republic of Singapore and the Government of New Zealand signed an Agreement for the avoidance of double taxation (DTA) today that incorporates the new internationally agreed Standard for the exchange of information. This is the second agreement Singapore has signed that incorporates the Standard.

2 The signing took place in Singapore between Mr Moses Lee, Commissioner of Inland Revenue, and His Excellency Mr Martin Harvey, New Zealand's High Commissioner to Singapore.

3 In March 2009, Singapore endorsed the new internationally agreed Standard for exchange of information which will enhance bilateral cooperation in information exchange upon request for tax matters. Since then, we have been renegotiating existing DTAs and negotiating new DTAs with numerous jurisdictions, including OECD countries. Several of these have progressed sufficiently with the agreements expected to be formally signed within the next few months, with some of these already initialled before formal signature.

4 The revised DTA between Singapore and New Zealand will also minimise the double taxation of income that may occur as a result of cross-border economic activities between both countries, thus promoting bilateral trade and investment. Other key changes under the revised DTA include the following:

a) Lower withholding tax rates for dividends, interest and royalties, which are 15% under the existing DTA. The new withholding tax rates for interest and royalties are 10% and 5% respectively, while the withholding tax rates for dividends are 5% or 15%, depending on the shareholding structure; and

b) Change to the definition of a Permanent Establishment to incorporate a building site, a construction, installation or assembly project if it lasts more than 12 months, instead of six months in the existing DTA.

5 The full text of the DTA will be made available on the Inland Revenue Authority of Singapore's (IRAS) website. The DTA will enter into force after its ratification by both countries.