Singapore United Arab Emirates DTA

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Aug 21, 2024
4 min read

Updated: Dec 27, 2024

Singapore United Arab Emirates DTA | Bestar

The Singapore United Arab Emirates Double Taxation Agreement (DTA) is a treaty designed to prevent double taxation for individuals and businesses operating in both countries. It was initially signed in 1989 and entered into force in 1991.

Key provisions of the DTA include:

Elimination of double taxation: The DTA ensures that income is only taxed once, either in Singapore or the UAE.
Tax relief: Depending on the type of income, either Singapore or the UAE will grant tax relief to prevent double taxation.
Tax rates: The DTA specifies the maximum tax rates that can be applied to different types of income in each country.
Residency: The DTA defines the criteria for determining residency in Singapore and the UAE, which is crucial for determining tax obligations.
Exchange of information: The DTA allows for the exchange of information between the tax authorities of Singapore and the UAE to prevent tax evasion and ensure compliance.

Modifications and updates:

Multilateral Instrument (MLI): In 2019, Singapore and the UAE signed the MLI, which introduced several changes to the DTA. These changes align the DTA with international standards and address specific areas such as dispute resolution and the taxation of permanent establishments.
Protocol: In 2014, a protocol was signed to amend the DTA. This protocol introduced new provisions related to the taxation of shipping income and other related matters.

Singapore-United Arab Emirates Double Taxation Agreement (DTA)

The Singapore-United Arab Emirates Double Taxation Agreement (DTA) is a bilateral treaty designed to prevent individuals and businesses from being taxed twice on the same income by both countries. This agreement aims to promote economic ties and investment between the two nations.

Key Provisions

Elimination of Double Taxation: The DTA ensures that income is taxed only in the country where it has its source or where the individual or business is considered a resident.
Tax Relief: To prevent double taxation, either Singapore or the UAE will provide tax relief, such as a deduction or exemption from tax.
Tax Rates: The DTA specifies the maximum tax rates that can be applied to different types of income in each country.
Residency: The agreement defines the criteria for determining residency in Singapore and the UAE, which is crucial for determining tax obligations.
Exchange of Information: The DTA allows for the exchange of information between the tax authorities of Singapore and the UAE to prevent tax evasion and ensure compliance.

Specific Provisions

Business Profits: Generally, business profits are taxed in the country where the business is carried on. However, the DTA includes provisions to prevent double taxation in cases of permanent establishments or when a business is carried on through an agent.
Dividends: Dividends paid by a company resident in one country to a resident of the other country are typically taxed in the country of the recipient. However, the DTA may allow for a reduced withholding tax rate or exemption from tax in certain circumstances.
Interest: Interest income is generally taxed in the country where the interest arises. However, the DTA may allow for a reduced withholding tax rate or exemption from tax for certain types of interest.
Royalties: Royalties are generally taxed in the country where the property giving rise to the royalties is located. However, the DTA may allow for a reduced withholding tax rate or exemption from tax in certain circumstances.
Employment Income: Employment income is generally taxed in the country where the services are performed. However, the DTA may provide for exceptions in certain cases, such as when an employee is temporarily present in the other country.

Amendments and Updates

Multilateral Instrument (MLI): Both Singapore and the UAE have signed the MLI, which introduces several changes to the DTA. These changes align the agreement with international standards and address specific areas such as dispute resolution and the taxation of permanent establishments.
Protocol: In 2014, a protocol was signed to amend the DTA. This protocol introduced new provisions related to the taxation of shipping income and other related matters.

For more detailed information, you can refer to the official documents:

How Bestar Can Help You

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