The double tax agreement between Hong Kong and Singapore
The double tax agreement between Singapore and Hong Kong is useful for taxpayers who are residents in one of the country and produce income in the other one or in both countries. This bilateral treaty between the two countries helps protect individuals from being taxed twice: once on the country where the income is produced and in the country of residence where the income is received.
Taxes covered by the DTA between Singapore and Hong Kong
The treaty specifies the types of taxes covered in each country. In the Hong Kong Special Administrative Region the taxes covered are the profits tax and the salaries tax. In Singapore the tax to which the agreement applies is the income tax.
The double tax treaty
will apply to all and any taxes imposed by one of the country in place of or in addition to the ones described above. Also, each Contracting Party must notify the other if any changes should occur in its taxation laws.
Implications for Hong Kong and Singapore residents
Only residents of Singapore or Hong Kong can benefit from the provisions of the treaty. In case of the Hong Kong Special Administrative region a resident is an individual who is a permanent or temporary resident for the purpose of the Inland Revenue Ordinance. In case of Singapore, an individual is a resident for the purpose of the Singapore income tax. The treaty applies to individuals, companies and other body of persons, incorporated or unincorporated.
A permanent establishment that is taxed under the laws of one of the countries can include a place of management, a branch in Hong Kong
or Singapore, an office, factory, warehouse, workshop, construction site, mine or others.
Our Hong Kong company formation agents can tell you more about the taxation of dividends under this agreement as well as detail the manner in which the double taxation relief methods apply in Singapore or Hong Kong.