Ratification Of The New Agreement Between Singapore And Germany For The Avoidance Of Double Taxation

The new Agreement for the Avoidance of Double Taxation between Singapore and Germany comes into effect on 12 December 2006. This follows the completion of ratification formalities and exchange of ratification instruments in Berlin.

2. The new Agreement will replace the old Agreement signed on 19th February 1972. The new Agreement is necessary because of changes in economic circumstances and policies of both Singapore and Germany. The provisions of the new Agreement will cover income derived on or after 1st January 2007. The new Agreement will continue to help investors avoid the burden of double taxation of income flows between Singapore and Germany and further facilitate the cross-flow of trade, investment, financial activities and technical know-how between the two countries.

3. The changes in the new Agreement include the changes in withholding tax rates on interest and royalties. The rates will be reduced, from 10% to 8% for interest, and to 8% for royalties (instead of the domestic rates).

4. The full text of the new Agreement is published in the Government Gazette today, and is also available on the website of the Inland Revenue Authority of Singapore at www.iras.gov.sg

MINISTRY OF FINANCE