Under the Agreement between Singapore and Japan, both individuals and businesses are considered to be established for tax purposes in one of the two Contracting States. The development of international trade and multinationals has increased the need to address the issue of double taxation. As a company or person looking for business and investment opportunities beyond your own country, you would obviously be concerned about the issue of taxation, especially if you might have to pay taxes on the same income twice in the host country and in your home country. Therefore, you are trying to structure your business in order to optimize your tax position and thus reduce costs, which would increase your global competitiveness. This is where the relevance of Singapore`s DTAs or tax agreements comes in. The actual methods of reducing double taxation can be achieved by a tax credit or a tax exemption. In the case of the exemption method, it may be granted in whole or in part. The agreement may also propose reduced rates (as can be seen above in the table) or by reduction by deduction. As a general rule, the DBA will only allow a tax credit in the country of residence if the income was taxed in the country of origin. The double taxation agreement between Singapore and Japan provides very advantageous conditions and if you need help or additional information, you can count on our accountants. You can also request details about the tax system in Singapore. Like any other double taxation treaty concluded by Singapore, this one contains valuable information with Japan on how tax residency is set up in order to avoid the collection of similar taxes on taxpayers who operate in both countries. This Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion on Income was signed by Singapore and Japan in 1994 and entered into force in 1995.
A protocol to this agreement was signed in 2010. Japan is only one of the countries with which Singapore has signed a double taxation treaty. In total, Singapore has concluded more than 80 DTAs with countries around the world. Methods of reducing double taxation are provided for either by a country`s national tax legislation or by the tax treaty. The methods available in Singapore are as follows: if none of the above criteria apply, the tax authorities of both countries agree on how tax residency is set, but this is rarely the case. If you have any questions about taxing foreign nationals in the city-state, our accountants in Singapore can advise you on a case-by-case basis. . . .