Singapore-China Avoidance Of Double Taxation Agreement

As has already been said, the main objective of a double taxation agreement, such as the one between Singapore and China, is to avoid taxing similar incomes in two different states. The most common income of businesses and individuals is the profits from business activities, real estate, employment and other income such as interest, dividends and even intellectual property rights. One of the most important conditions for the application of the double taxation agreement between Singapore and China is that those who apply for benefits granted by such an agreement comply with the conditions of residence. These conditions apply to individuals as well as businesses in Singapore and China. From an investor`s perspective, there can be confusion about international taxation when investors are subject to two different and potentially conflicting tax systems. For example, Hong Kong and Singapore have a “territorial source principle” of taxation, which means that only profits made locally are taxable. While foreign investors are using the Chinese DBA and the DBA of Hong Kong, Singapore and other countries to invest in China, China has made considerable progress over the past five years in implementing double taxation regulations and implementing protection techniques. One of the first chapters of the Singapore-China double taxation convention concerns the status of stable establishments of companies registered in one contracting state and operating in the other. Although all Singapore double taxation conventions contain such provisions, it is important to note that each agreement is different and includes specific provisions on the status of foreign companies operating in Singapore.

China`s general anti-avoidance rules were first introduced under the 2008 Corporate Tax Act, which provides that the tax administration has the right to make adjustments if a company`s taxable income is reduced due to the implementation of “agreements that have no reasonable purpose.” Double taxation can be avoided if foreign income is exempt from national tax. The exemption may be granted for all or part of the foreign income. Exemption from dividends from foreign sources, branch and service revenues – Section 13 (8) of the Singapore Income Tax Act A Singapore resident company may benefit from a tax exemption for foreign dividends, branch profits and foreign services transferred to Singapore if the following conditions are met: Our Singapore audit firm is available with tailored advice on the conditions that must be met to be considered firm. use the provisions of a double taxation agreement. Under the Singapore Convention on Double Taxation, China is a stable institution: in addition to its nominal function of double taxation protection, most DBAs also contain “tax substances” for experienced international companies that you can use, for example. B: Another important aspect of the Singapore and China Convention on double taxation concerns associated companies.