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Singapore – Japan Double Tax Treaty

Updated on Wednesday 09th December 2015

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Singapore-Japan-Double-Tax-Treaty.jpgSingapore and Japan, both highly developed economies, have signed a treaty for the avoidance of double taxation in 1961, 1971 and in 1994. The Double Taxation Agreement (DTA) signed in 1994 and ratified on 1st of January 1996 is still applicable today, with the mention that in February 2010 the Agreement was amended by a Protocol, in which few provisions have been modified. If you are interested in company registration in Singapore, our company formation specialists can provide you the information you need. 

Important Provisions of the Singapore- Japan DTA

The agreement between the two states refers to the following taxes: 
 
the Japanese authorities will apply taxes on the Income Tax, the Corporation Tax, the Local Inhabitant taxes;
the Singaporean authorities will apply taxes only on the Income Tax. 
The difference is given by the taxation laws applicable in each contracting state. 
 
Dividends paid by a Japanese company which is a resident of Japan to a resident of Singapore can be taxed in Singapore. The other situation is also available, as the agreement has reciprocal rights and obligations. Dividends are taxes as follows:
 
if the beneficial owner is a company which has at least 25% of the voting shares of the company paying the dividends during the period of six months before the end of the financial year, the withholding tax on dividends will be of 5% of the gross amount;
for all other cases, the tax on dividends is 15% of the gross amount.

Tax on Interest 

Interest arising in a company from Singapore that has to be paid to a resident from the other contracting state –Japan, can be taxed in Japan. The interest can also be taxed in the contracting state where it is produced as long as the recipient is the owner of the interest. The tax imposed will be of a maximum rate of 10% of the gross amount.  If you are interested in company registration in Singapore, you should know that certain companies can be exempted from paying the taxes on interest as long as their operations include manufacturing, assembling, constructions, civil engineering, mining or agriculture activities; our specialists in company formation can provide you with information on this subject. 
 
If you need further information on Singapore- Japan Double Tax Treaty, please contact our specialists in company formation, who can offer you consultancy on the corporate tax provisions stated in the agreement
 

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