Double Tax Agreement Singapore India

Double Tax Agreement Singapore India

Double Tax Agreement between India and Singapore: Everything You Need to Know

Are you looking to invest in Singapore or India? Do you want to know about the Double Tax Agreement (DTA) between these two countries? Well, this article is for you.

What is Double Tax Agreement?

Double Taxation Agreement (DTA) is an agreement signed between two countries to avoid paying taxes twice on the same income. In simpler terms, it means that if you are a resident of one country and earn income in another country, you won`t have to pay taxes on that income in both countries.

Double Tax Agreement between India and Singapore

The Double Taxation Avoidance Agreement (DTAA) between India and Singapore was signed on 29 December 1994 and revised on 30 December 2005. This agreement helps in avoiding double taxation for the residents of both countries who earn income from the other country.

Who is covered under this agreement?

This agreement covers individuals, companies, firms, and any other legal entities who are residents of either India or Singapore. The term `resident` means a person who is liable to pay tax in India or Singapore, based on their domestic tax laws. However, the agreement does not cover individuals who are living in India or Singapore for a temporary period.

What does this agreement cover?

The DTA between India and Singapore covers various types of income, including business profits, salaries, dividends, interest, royalties, capital gains, and others. It specifies the tax rates that will be applicable to these incomes in the respective countries.

For example, if a Singaporean company operates in India, the income it earns from India will be taxed in India. However, because of this agreement, the company won`t have to pay taxes on the same income in Singapore.

Benefits of the DTA to Investors

The DTA between India and Singapore provides many benefits to investors, including:

1. Avoidance of double taxation – As mentioned earlier, the agreement helps in avoiding double taxation, which provides relief to investors.

2. Reduced tax rates – The agreement specifies the tax rates applicable to different types of incomes, which are generally lower than the regular tax rates.

3. Ease of doing business – The agreement reduces the tax barriers between India and Singapore, making it easier for investors to do business in both countries.

4. Certainty and transparency – The agreement provides certainty and transparency to investors regarding their tax liabilities in both countries.

Conclusion

In conclusion, the Double Taxation Avoidance Agreement (DTAA) between India and Singapore is a significant agreement that benefits investors from both countries. It provides relief from double taxation, reduces tax rates, and eases doing business. If you are planning to invest in either India or Singapore, it`s important to understand this agreement to maximize your benefits.

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