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Singapore-Switzerland Double Taxation Treaty

Singapore-Switzerland Double Taxation Treaty

Singapore and Switzerland have signed the first treaty on the avoidance of double taxation in 1975; since then, the agreement between the two states has been updated and in February 2011 a new version was signed; the new double taxation treaty (DTA) entered into force in August 2013 and became applicable since the 1st of January 2013. If you are a Swiss investor interested on the characteristics of the business market available here, our lawyers in Singapore can offer you more information on the subject. 

Taxes covered by the Singapore-Switzerland DTA

The agreement between the two states is applicable to taxes on income or on elements of income, including the taxes applicable to the movable or immovable property. The treaty is available in Singapore for the income tax and in Switzerland on the following taxes:

• communal tax;

• federal tax,

• cantonal tax.

Taxes to which the treaty is applicable are not the same in the contracting states because the legislative system applicable in Switzerland and Singapore differ; our law firm in Singapore can present to you more details about the tax legislation available here.

Main provisions of the Singapore – Switzerland DTA

The revisited treaty between the two contracting states encourages trade and direct investment between Singapore and Switzerland. The treaty has offered new provisions on the exchange of information for tax purposes; it has also changed the meaning of the permanent establishment and has lowered the rates on the withholding tax on dividends and interest

According to the Article 5 of the treaty, a permanent establishment (PE) represents the place of business in which a company carries its operations in the other contracting country; a PE can represent a branch, an office, a factory, a mine or a building site or the furnishing of services, which are considered a PE if they provided for more than 300 days in a twelve months period. 

Swiss company with operations in Singapore will pay taxes on dividends at the rates of 5% or 15% of the gross amount of the dividends; our lawyers in Singapore can explain how these rates will be applied. Interest paid by the companies will be taxed at a 5% rate in Singapore, as well as in Switzerland

If you need further information on the Singapore – Switzerland double taxation treaty, please contact our law firm in Singapore