Singapore, France Tax Treaty Enters Into Force

The double taxation avoidance agreement between Singapore and France entered into force on June 1, 2016.

Under the deal, withholding tax on dividends would be capped at 15 percent in general; and at five percent where the beneficial owner is a company that owns directly or indirectly at least ten percent of the share capital of the company paying the dividends. The withholding tax on interest would be subject to a maximum rate of ten percent.

Next, the treaty provides that royalties arising in a country and beneficially owned by a resident of the other country will be taxable only in that other country. However, royalties received as consideration for the use of, or the right to use, any copyright of literary or artistic work, including cinematograph films and tapes for television or broadcasting, or for information concerning commercial experience may be taxed in accordance with the law of the country in which they arise.

The treaty also includes provisions to prevent treaty abuse; to resolve treaty disputes through a mutual agreement procedure; and to exchange tax information between the tax administrations of both countries.

The new treaty provisions will be effective from January 1, 2017.