The Double Taxation Agreement (DTA) is a bilateral agreement between Singapore and other countries to relieve taxpayers of the burden of paying double tax on the same income earned as a result of cross-border economic activities. Taxpayers can also get tax reductions or exceptions on certain types of income through these DTAs. These benefits can only be availed by Singapore tax residents and the tax resident of the treaty partner.
DTA for Singapore Tax Resident
As a Singapore tax resident, if you earn foreign income from a treaty country, you would either not be required to pay any tax or pay tax at a reduced rate to the other country. You would need to submit a Certificate of Residence (COR) to the foreign jurisdiction to prove that you are a Singapore tax resident.
DTA for Tax Resident of a Treaty Country
On the other hand, if you are a tax resident of the treaty country and derive income from Singapore, you can file for tax relief from Singapore Income Tax under the DTA. One would need to submit a Certificate of Residence from Non-Residents, which is certified by the tax authority of the country of residence to IRAS.
The terms and reliefs of each DTA concluded by Singapore differ from country to country. In Singapore, the relief methods include tax credits, reduced tax rate, tax exception, tax sparing credit, and relief by deduction. In case Singapore doesn’t have a DTA with a country, you can get a unilateral tax credit for the foreign income taxes paid on the income earned.
Singapore already has an extensive list of countries they have DTAs with and is continuously working on adding more. Click here to access the latest list of DTAs.