Avoidance of Double Taxation Agreements (DTAs)
International double taxation results when the same income is being taxed twice; once in the country where the income arises (country of source) and another in the country where the income is received (country of residence).
To mitigate the effects of double taxation, a country may enter into DTAs with other countries. A treaty country refers to a country which has signed a DTA with Singapore.
Only the tax residents of Singapore and the respective treaty country can enjoy the benefits of a DTA.
Benefits Under DTAs
Depending on the provisions of the DTA, you may claim the benefits of an exemption from the tax on income for personal services, teachers, researchers, artistes, athletes, students, trainees, etc.
As the provisions for each DTA may be different, you need to refer to each tax treaty for the specific provisions applicable to you.
Tax Residents of Treaty Countries
If you are a tax resident of a foreign country that has concluded a tax treaty with Singapore, you may be protected from being taxed twice on the same income in Singapore.
Exemption on Short-Term Singapore Employment Income
The DTA article for 'Dependent Personal Services' provides the source rules for income from employment. The country of source is usually where the services are provided / employment is exercised. For short-term employment and to facilitate the movement of qualified personnel, exemption of tax is granted by the "country of source".
These conditions apply in most tax treaties:
- The recipient is present in the source country not exceeding a certain specified period (most treaties provide for a period of not more than 183 days. You may wish to refer to the specific treaty for the time period); and
- The services are rendered for, or on behalf of a person, who is a resident of the country of residence; and
- The remuneration is not borne by a permanent establishment, or fixed base which the employer has in the country of source.
To check if you are eligible for tax treaty exemption, please use our Tax Treaty Calculator for Personal Services Rendered by Employees (XLS, 269KB).
If you are eligible for tax treaty exemption, you should submit the Claim for Tax Treaty Exemption and Certificate of Residence to IRAS.
Please refer to Working for Foreign Employers related examples for more information.
Tax Residents of Singapore
When you earn foreign income from a treaty country, you may be subject to tax in that foreign country. However, you may wish to claim the DTA benefit that entitles a Singapore tax resident to enjoy a reduced tax rate or a tax exemption in that foreign country.
To enjoy this benefit, you need to submit the Certificate of Residency (COR) to the foreign tax authority to prove that you are a Singapore tax resident.
Applying for Certificate of Residence
This Certificate of Residence is a letter certifying that you are a tax resident in Singapore for the purpose of claiming benefits under the DTA.
For more information, please refer to How to Apply for COR.