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Updated UK-Singapore DTA In Force

Thursday, January 3, 2013

A Second Protocol amending the standing Agreement for the avoidance of double taxation (DTA) between Singapore and the United Kingdom has entered into force, according to Singapore's Inland Revenue Authority.

The Second Protocol, which entered into force on December 27, 2012, revises certain terms in the current DTA between the two countries, such as updating Article 5 (Permanent Establishment) and lowering the withholding tax rates in Article 10 (Dividends), Article 11 (Interest) and Article 12 (Royalties).

The Second Protocol to the DTA was signed in Singapore on February 15, 2012, by Lord Green of Hurstpierpoint, the UK's Minister of State for Trade and Investment, and Josephine Teo, Singapore's Minister of State for Finance & Transport.

The Protocol sets a withholding tax rate for dividends at 0%, except in the case of real estate investment trusts, which will be taxed at 15%. The headline interest withholding tax rate under the protocol is 5%, with certain entities charged at a 0% rate. Royalties will be taxed at 8%.

The treaty was originally signed in 1997, with the latest exchange of information standards inserted in 2009. According to Singapore's Ministry of Finance, the changes will serve to enhance trade and investment flows between the two countries.