Print

On December 1, 2021 the Inland Revenue Authority of Singapore issued a press release announcing that the Agreement between the Republic of Singapore and the Federative Republic of Brazil for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (“DTA”), signed on May 7, 2018, entered into force on December 1, 2021.

 

Based on Article 30 of the DTA, its provisions shall have effect:

a)  in Brazil:

(i) in respect of taxes withheld at source, on income paid, remitted or credited on or after January 1, 2022; and

(ii) in respect of other taxes, on income arising in the taxable years beginning on or after January 1, 2022;

b)  in Singapore:

(i) with regard to taxes withheld at source, in respect of amounts paid, deemed to be paid or liable to be paid (whichever is the earliest) on or after January 1, 2022; and

(ii) with regard to taxes chargeable (other than taxes withheld at source), in respect of income for any year of assessment beginning on or after January 1, 2023;

 

in respect of Article 27 (Exchange of Information), for requests made on or after December 1, 2021 concerning information for taxes relating to taxable periods beginning on or after January 1, 2022; or where there is no taxable period, for all charges to tax arising on or after January 1, 2023.

 

Article 5, Permanent Establishment

·     Threshold of six months for construction-related activities, beyond which residents of a contracting state could trigger a taxable presence in the other contracting state;

·     Threshold of 183 days in any twelve-month period for the furnishing of services by an enterprise of a contracting state within the other contracting state

 

Article 10, Dividends

·     10% withholding tax rate (if shareholding ≥ 25% throughout a 365-day period)

·     15% withholding tax rate (all other cases)

 

Article 11, Interest

·     10% withholding tax rate (if the beneficial owner is a bank and the loan has been granted for at least five years for the financing of the purchase of equipment or of investment projects)

·     15% withholding tax rate (all other cases)

 

Article 12, Royalties

·     15% withholding tax rate (use or the right to use trademarks)

·     10% withholding tax rate (all other cases)

 

Furthermore the DTA contains o.a. articles arranging mutual agreement procedures (Article 26), the exchange of information (Article 27) and the entitlement to benefits (Article 28). Article 28 ( Entitlement to Benefits) is a very extensive article.

 

The English text of the DTA as available on the website of the Inland Revenue Authority of Singapore can be found here.

 

 

Copyright – internationaltaxplaza.info

 

 

Follow International Tax Plaza on Twitter (@IntTaxPlaza)