Double Taxation Agreement Singapore Sri Lanka
IT is informed, under Section 97 (1)b) of the Inland Revenue Act, No. 10 of 2006, that the bilateral double taxation and tax evasion prevention exemption agreement concluded on 3.04.2014 between the Government of the Democratic Republic of Sri Lanka and the Government of the Republic of Singapore was approved by Parliament by resolution of 23.09.2015. Both countries use the credit method to eliminate double taxation. For dividends paid by a Sri Lankan resident company to a Singapore-based company that directly or indirectly owns at least 10% of the Sri Lankan payer`s share capital, Singapore will provide a Sri Lankan tax credit paid on the profits on which the dividends are paid. The revised double taxation agreement between Singapore and Sri Lanka provides for a reduced withholding tax on dividends. The rate is 7.5% compared to the previous 15%. This is the case when the beneficiary is domiciled in the other state and the economic beneficiary of a company that holds at least 25% of the capital of the company`s dividend payment. In all other cases, the rate is 10%. The revised double taxation agreement between Singapore and Sri Lanka came into force on 31 December 2017. It replaces the contract originally signed in 1979 and contains new provisions for stable settlement in both legal orders as well as a reduction in the rate of the source of dividends. Our team of lawyers in Singapore informs about changes to the revised contract and can help you with additional information.
Experts from our audit firm in Singapore can give you more information about the articles of the contract that have been revised in the 2017 version. Other changes relate to the taxation of the benefits of shipping and air transport, and our accountants can give you full guidance on tax issues relating to singapore and Sri Lanka shipowners subject to the revised provisions of the DBA. The contract provides that a stable establishment is considered constituted when a company provides services within a contracting state through workers or other staff engaged for the same project or related project for a period or period covering more than 183 days over a 12-month period. Note – The final protocol of the contract specifies that payments for computer software are only considered royalties if payments relating to the right to use and use of copyright are made in the program. Your email address will not be published. The required fields are marked at 2. Among other things, the revised DBA reduces withholding rates on dividends and royalties and updates provisions for the determination of stable institutions. It also contains the internationally agreed standard for the exchange of tax information.
These changes are expected to strengthen trade and investment flows between the two countries. The revised contract also makes changes to an institution`s classification for the purposes of the DBA.