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Company Formation Singapore



Singapore-US Limited Tax Treaty

Updated on Monday 18th December 2017

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Singapore-US-limited-tax-treatyThe taxation treaty between Singapore and the United States

Singapore has signed numerous taxation agreements over the years. While most of them are double taxation treaties, Singapore has also signed two limited taxation conventions:

  • -          one with the United States of America;
  • -          the second ones with the United Arab Emirates.

The limited taxation agreement with the US was enforced in 1988. The convention is limited because it only covers the tax applied to income derived from the international operation of aircraft and ships. Our specialists in company formation in Singapore can provide you with more information about the agreement between the city-state and the United States.

Tax exemptions under the limited tax treaty between Singapore and the US

Under the limited tax agreement, Singapore has agreed to provide a tax exemption to US citizens and companies. The exemption to companies will be granted provided that the following conditions are met:

  • -          the company has a registered address in Singapore and more than 50% of its shares are owned by an US company or citizen;
  • -          the company’s stock is primarily traded on the US Stock Exchange.

In the case of the United States the limited tax treaty provides for the tax exemption to be granted if:

  • -          50% of the company’s shares are owned by a Singapore company or citizen;
  • -           the company’s stock is primarily traded on the Singapore Stock Exchange.

The Singapore-USA limited tax treaty covers several elements of the income derived from international traffic of ships and aircraft.

The income covered by the Singapore-US limited tax agreement

Both states have agreed that the limited tax convention will cover the following incomes:

  • -          income derived from operating aircraft and ships;
  • -          income derived from renting aircraft and ships;
  • -          income derived from bareboat, in the case of ships;
  • -          income derived from selling aircraft or ships;
  • -          income derived from the rental of equipment used for international transport;
  • -          income derived from participation in air transportation or shipping companies.

The agreement also establishes that in the case of air transportation, the tax exemption will apply to incomes from carrying passengers, mail, livestock and other goods, as well as to ticket sales.

For assistance in taxation matters in Singapore, do not hesitate to contact our local agents.



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