If payment is made to the copyright owner for the full sale of their copyright, the transaction is a sale of the copyright. In the hands of the copyright owner, all profits resulting from such a sale represent either his business income or capital gains. Proceeds from the sale paid to a non-resident are not subject to withholding tax. A Singapore-based company received a loan from outside Singapore to buy a property overseas for investment purposes. Is interest subject to withholding tax? In the absence of a contract or agreement, the invoice date will be considered a payment date. The date of the general meeting at which the directors` fees are declared shall be deemed to be the date of payment for the purposes of withholding tax. A non-resident company, through a Singapore-based company, took out a loan from another non-resident company to acquire a vessel. Is interest paid to non-residents subject to withholding tax? Is a payment to a non-resident supplier subject to withholding tax for the adaptation of software? If the cost of the equipment is included in the payment to the non-resident supplier, is the portion attributable to the equipment subject to withholding tax? Singapore has entered into double taxation treaties (DTAs) with many countries to prevent companies and individuals from being taxed by both jurisdictions. If your company operates from a country that has a tax treaty with Singapore, the DTA can provide double taxation relief. Note that this depends on the particular service of your company as well as the specific provisions of the DTA in your country. For more information, see our guide to double taxation treaties in Singapore.

A Singapore-based company paid interest to a non-resident on a loan granted for the operation of its branch outside Singapore. Is interest subject to withholding tax? However, a withholding tax may be levied on payments for additional services physically provided in Singapore, such as. B further maintenance of software, user training, customization of software or information and development of complementary applications which do not fall within the scope of the rights-based approach. Payments for digitized software or goods that are not associated with the transfer of copyright embedded in the goods are considered payments for copyrighted items and are not subject to withholding tax. This organizational chart (PDF, 101 KB) provides an overview of the tax implications of these payments. A Malaysia-based company providing technical services in Singapore is subject to a withholding tax rate of 5 per cent on gross charges for services provided in Singapore, as provided for in the Commission`s article on technical services. The 5% rate only applies if the Malaysian company does not have festivals in Singapore. If the services of the U.S. consulting firm are provided in Singapore, the fees are subject to withholding tax. If, on the other hand, the services are provided in whole or in part outside Singapore, only the payment attributable to the services provided in Singapore is subject to withholding tax. (a) In general, withholding tax is levied on interest paid to a non-resident company. However, if the money is placed with a licensed bank in Singapore, it is not necessary to withhold taxes if the interest is paid to a non-resident company which: In order to reduce the administrative burden on the companies, the administrative concession will be extended to the reimbursement of airline tickets and accommodation on the basis of published fares, provided that the following conditions are met: Payments that require withholding taxes in Singapore include payments for services, interest, royalties, rentals of movable property and direct payments to non-residents.

Compared to traditional income tax, where tax is levied on the beneficiary, withholding tax is paid directly at source, i.e. to the payer, deducted. In general, the obligation to deduct at source is incumbent on the non-resident. The payer (e.B. however, a Singapore company) is obliged to withhold the correct amount and pay the withholding tax to IRAS. Singapore withholding tax (referred to as withholding tax in other countries) refers to the tax that is withheld and paid to the Inland Revenue Authority of Singapore (IRAS) when a non-resident corporation or non-resident individual earns income from Singaporean sources for services or work performed in Singapore. IRAS is the tax authority of Singapore. However, if there are 2 separate loan agreements, the withholding tax is levied on the interest due to the non-resident company as it is borne by a singapore resident.

In some of our DTAs (in particular Australia1, Pakistan, the Republic of Korea2, Sweden and Taiwan), some payments, such as e.B. Payments for personal work or services, excluded from the corporate profits section, since the definition of “business profits” does not include these payments. In such cases, fees for services provided in Singapore are subject to withholding tax, whether or not the non-resident has a permanent establishment in Singapore. Payment to non-resident merchants (non-legally competent company) Payers who are subject to withholding tax must submit and pay tax to IRAS by the 15th of the second month following payment. The payment term is based on the date closest to the recipient`s contract, invoice, payment or credit time. (b) If the funds used by the non-resident to deposit with a licensed bank in Singapore do not originate from the Company`s operations in Singapore, no withholding tax will be levied. Otherwise, withholding tax is applicable – the withholding tax rate depends on whether or not the recipient resides in a jurisdiction with which Singapore has entered into a double taxation avoidance agreement (DTA): if the withholding tax is not paid within 30 days of the due date indicated on the memorandum of formal notice, penalties will be charged. Software payments are considered royalties for withholding tax purposes, with the exception of payments for shrink packaging software, site licenses, downloadable end-user software, and software bundled with computer hardware. Such an exemption only applies if buyer does not acquire commercial rights in its copyright, reproduces, reverse engineers, decompiles or modifies the Software.

Withholding tax is not applicable because the charges are separate from the underlying debt from the principal sum of the bonds/debentures and are not payments in exchange for or from that debt. Singapore has an extensive network of double taxation treaties (DTAs) that can reduce the tax burden on non-residents earning income in Singapore. A non-resident company or a non-resident individual operating in a jurisdiction that has a tax treaty with Singapore pays the rate specified in the DTA. Note that the type of relief depends on the services provided and the provisions of the DTA. The following payment methods are subject to withholding tax when paid to non-resident corporations: If tax has been incorrectly deducted at the applicable corporate tax rate of distributions to nominees whose beneficiaries are one of the persons listed below, the Controller will refund the over-deducted tax to the REIT trustee on a quarterly basis. Beneficiaries may be one of the following: No, interest is not subject to withholding tax as it relates to a business carried on outside Singapore through a permanent establishment outside Singapore. This is subject to the condition that interest cannot be deducted from income from or from Singapore. If a payment is made to a copyright owner for the transfer of partial copyright rights (e.B. Copyright license that must be commercially exploited by the payer), payment is a license fee. These payments to non-residents are subject to a withholding tax of 10% or the reduced rate provided for by a double taxation agreement (DTA). If the non-resident company is domiciled in a jurisdiction that does not have a permanent contract with Singapore, the withholding tax rate is the current corporate tax rate (i.e.

17%). Payments to public artists and non-resident professionals who provide services in Singapore are also subject to a final tax of 15% on their gross income. For public artists, this seems to be a final tax, unless they are considered tax residents of Singapore. However, non-resident freelancers may choose to be taxed at the 22% tax rate applicable to non-resident natural beings on net income if this results in lower tax costs. The whT rate for payments to non-resident artists was reduced to 10% between February 22, 2010 and March 31, 2022. Is payment for web hosting services provided by a non-resident company subject to withholding tax? Guarantee fees paid to the non-resident holding company are not considered derivatives in Singapore if the non-resident holding company is not registered, incorporated or registered in Singapore and: If there is only 1 loan agreement and the Singapore resident company is not a party to the agreement (i.e. it acts only as an intermediary), the withholding tax will not be charged. You can consult this organizational chart (PDF, 235 KB) to determine whether the withholding tax is levied on fees paid to non-residents for administrative services provided.

In general, payments to non-residents for services provided in Singapore are subject to withholding tax. The portion of the purchase price of the software system attributable to the services provided in Singapore is subject to withholding tax. .