Singaporean – San Marinese DTA entered into force

On December 18, 2015 the Inland Revenue Authority of Singapore issued a press release announcing that on that same date the Agreement between the Government of the Republic of Singapore and the Government of the Republic of San Marino for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (Hereafter: the DTA) entered into force.

Based on Article 27, Paragraph 2 of the DTA (“Entry into Force”) this means that the provisions of the DTA shall have effect:

(a) in Singapore:

(i) in respect of taxes withheld at source, on amounts liable to be paid, deemed paid or paid (whichever is the earliest) on or after January 1, 2016;
(ii) in respect of tax chargeable (other than taxes withheld at source) for any year of assessment beginning on or after January 1, 2017; and
(iii) in respect of Article 25 (Exchange of Information), for requests made on or after the date of entry into force concerning information on taxes relating to taxable periods beginning on or after 1 January of the calendar year next following the year in which the Agreement enters into force; or where there is no taxable period, for all charges to tax arising on or after January 1, 2016.

(b) in San Marino:

(i) in respect of taxes withheld at source, on amounts paid or payable on or after January 1, 2016;
(ii) in respect of tax chargeable (other than taxes withheld at source) for any year of assessment beginning on or after January 1, 2017; and
(iii) in respect of Article 25 (Exchange of Information), for requests made on or after the date of entry into force concerning information on taxes relating to taxable periods beginning on or after 1 January of the calendar year next following the year in which the Agreement enters into force; or where there is no taxable period, for all charges to tax arising on or after January 1, 2016.

Below we will highlight some of the provisions included in the DTA.

Article 5, Paragraph 3 of the DTA (“Permanent Establishment”) arranges that the term “permanent establishment” also encompasses:
(a) 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;
(b) the furnishing of services, including consultancy services, by an enterprise of a Contracting State 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 in any 15 month period.

Based on Article 10 of the DTA (“Dividends”) a Source State is not allowed to withhold withholding tax over dividend distributions.

Article 11, Paragraph 2 of the DTA (“Interest”) maximizes the withholding tax a Source State is allowed to withhold over interest payments to 12 per cent of the gross amount of the interest if the beneficial owner of the interest is a resident of the other Contracting State.

Article 12, Paragraph 2 of the DTA (“Royalties”) maximizes the withholding tax a Source State is allowed to withhold over royalties to 8 per cent of the gross amount of the royalties. if the beneficial owner of the royalties is a resident of the other Contracting State.

Click here to be forwarded to the DTA as available on the website of the Inland Revenue Authority of Singapore, which will open in a new window.

Are you looking for an other DTA? Then check our section DTAs & TIEAs, a very efficient way to locate numerous DTAs.