Germany-Singapore Double Taxation Treaty

Germany-Singapore double taxation agreement

Germany and Singapore have started negotiating a double taxation agreement in 2004 followed by the conclusion and enforcement of the treaty at the beginning of 2007. The agreement applies to Singapore and German residents, as well as to companies registered in one of the countries and conducting business activities in the other. The taxes covered by the Germany-Singapore double taxation agreement are:

• -          in Singapore, the income tax,
• -          in Germany, the income, the corporate, the trade and the capital taxes.

You can obtain information about the country’s taxation system from our German lawyers.

Tax residency according to the Germany-Singapore double tax treaty

The taxation agreement Germany signed with Singapore establishes that the avoidance of double taxation is based on the determination of tax residency. The term “national” defines individuals and companies registered in Germany and Singapore under the German, respectively Singapore laws. With respect to tax residency, the Germany-Singapore double taxation treaty provisions that a resident of a Contracting State is a person or company liable to pay taxes in the country it was registered in. For Singapore and German companies, tax residency is also determined based on the place of management of the company.

 The Germany-Singapore double taxation agreement also defined the term “permanent establishment” as a fixed place of business of companies. Permanent establishments include branch offices, places of management, offices, construction sites and factories.

For more information about the contents of the double taxation treaty with Singapore you can ask our lawyers in Germany.

Taxation under the Germany-Singapore double taxation treaty

Under the Germany-Singapore agreement for the avoidance of double taxation, incomes resulted from the sale of immovable property and business profits may be taxed in the country they arise. With respect to the taxation of dividends, interests and royalties, the following reduced rates apply:

• -          5% on the gross amount of dividends distributed if the recipient owns at least 10% of the capital in the company paying the dividends,
• -          15% on the gross amount in all other cases,
• -          8% on the gross amount of the interest,
• -          8% on the gross amount of the royalties.

For detailed information about the country’s double taxation agreements, please contact our law firm in Germany.