(January 16, 2015)
On January 15, 2015 Singapore and France signed a revised Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (Hereafter: DTA). Although the DTA has been signed, it has not yet entered into force. The DTA will enter into force after both countries have finalized their respective ratification processes. This DTA will replace the existing DTA as concluded between France andSingapore in 1974. Some of the differences between the existing (1974) DTA and the DTA now signed regard a.o.:
The new DTA arranges that the term permanent establishment also encompasses a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only if such site, project or activities lasts more than 12 months. Whereas the existing (1974) DTA arranges that a building site or construction or assembly project which exists more than 6 months constitutes a permanent establishment.
Furthermore a paragraph is included in the new DTA that arranges that The term "permanent establishment" also encompasses: the furnishing of services, including consultancy services, by an enterprise of a Contracting State directly or through employees or other personnel engaged by the enterprise for such purpose, but only if activities of that nature continue (for the same or a connected project) within the other Contracting State for a period or periods aggregating more than 365 days within any 15-month period.
In the new DTA an appropriate adjustment clause is included in the Article on Associated Enterprises (Article 9 of the DTA).
Under the new DTA dividend withholding taxes are maximized at 5 per cent of the gross amount of the dividends if the beneficial owner is a company which owns directly or indirectly at least 10 per cent of the capital of the company paying the dividends. Under the existing (1974) DTA the dividend withholding taxes in such case are maximized at 10 per cent of the gross amount of the dividends.
Article 11 of the existing (1974) DTA regarding profits of permanent establishment and which reads as follows: ”Where a company which is a resident of a Contracting State has a permanent establishment in the other Contracting State, it may be subjected therein to any withholding tax provided by the laws of that other Contracting State but such tax shall not exceed 15 per cent of one-third of the profits of the permanent establishment after payment of the corporation tax on such profits.” is no longer included in the new DTA.
Furthermore the new DTA contains a redrafted Article regarding the Exchange of Information.
Above we have discussed some of the revisions that are included in the revised DTA as concluded between France and Singapore. For more information click here to be forwarded to the full text of the newly concluded DTA as published on the website of the Inland Revenue Authority of Singapore, which will open in a new window.
If you are interested in efficiently locating texts of more DTAs then click here to be forwarded to our section DTAs where you can link to numerous governmental websites on which you can find links to the texts of DTAs as concluded by that State.
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