The United Arab Emirates have signed the first double taxation agreement with Singapore in 1990 and it referred to the avoidance of double taxation of air transportation income. In 1997 the agreement was renewed and other incomes were added to the UAE-Singapore double taxation treaty. The newest protocol was added to the agreement at the end of October 2014 and is pending ratification both in Singapore and the UAE.
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The UAE-Singapore double taxation agreement
The double taxation agreement the UAE has signed with Singapore applies to the personal income earned by individuals residing in one or both countries. In the case of the UAE, the agreement covers the corporate and the income tax, while in the case of Singapore the treaty covers the income tax. The UAE-Singapore double taxation treaty also applies only to individuals registered for taxation purposes in one or both countries. The same principle applies to Singapore and UAE companies.
The UAE-Singapore double tax treaty specifies that the income resulted from selling or renting an immovable property may be taxed in one of the two countries. However, ships and aircraft are not deemed immovable property under the UAE-Singapore double tax treaty. With respect to business profits, the agreement provisions these will be taxed only in the country the company carries out its operations. The double tax treaty between UAE and Singapore also establishes how dividends, interests, and royalties will be taxed.
For more information about the avoidance of double taxation in the UAE, you can ask our company registration agents in Dubai.
The new protocol to the UAE-Singapore double tax treaty
The new protocol to the UAE-Singapore double taxation treaty was added last year and refers to permanent establishments. Under the old tax treaty, permanent establishments were considered any business activities carried out in one of the countries for at least six months, while the new protocol specifies any business activity carried out in one of the states is considered a permanent establishment after being undertaken for 300 days continuously. The new protocol also reduced the dividend withholding tax from 7% to 0%.
For more information about UAE’s list of double tax treaties, please contact our Dubai agents in company incorporation.