Singapore-Mongolia Double Tax Treaty

Singapore has an extensive network of double taxation agreements which made the city-state one of the most desired territories to do business in. In 2002, Singapore added Mongolia to this list, however the double tax treaty was enforced in 2005. The agreement covers both natural persons and legal entities residents from a taxation point of view in Singapore and Mongolia.

Our company formation agents in Singapore can offer detailed information on taxation and tax facilities for foreign investors in the city-state. They can also assist them in case they would like to open a company in Singapore.

Taxes covered by the Singapore- Mongolia double tax treaty

The tax convention between Singapore and Mongolia provides for the elimination of double taxation with respect to the following taxes:

• -          the individual income and the corporate taxes in Mongolia;
• -          the income tax in Singapore.

Related to companies, these can benefit from the double tax treaty if they have a permanent establishment in one of the two countries, such as Mongol companies with branch offices in Singapore and Singapore companies with branches or other places of management in Mongolia.

Avoidance of double taxation in Singapore and Mongolia

The Singapore-Mongolia double taxation agreement provides for the avoidance of double taxation through tax deductions in Mongolia and through exemptions or credits in Singapore, depending on the income or element of the income. Any earnings derived from real estate property in Singapore or Mongolia can be taxed in the country the property is located in. Capital gains will also be taxed in the source-country. The same provision applies to salaries. Our experts in company formation can help Mongolian businessmen open a company in Singapore. 

Reduced tax rates under the Singapore-Mongolia double tax treaty

The Singapore-Mongolia double taxation treaty also provides for several reduced tax rates related to dividend and interest payments. These rates are:

• -          5% on the dividend payments, provided that the recipient owns at least 25% of the share capital in the company paying them, and 10% in all other situation;
• -          5% on the interest payments, if these are received by banks or other financial institutions in a country, and 10% in all other situations.

Royalties payments are subject to a 5% tax applied on the gross amount.

For complete information on the double taxation agreement with Mongolia, do not hesitate to contact our company formation representatives in Singapore.