The provisions of the treaty are generally reciprocal (applicable to the two contracting countries) and non-discriminatory, i.e.: You would not be in a worse tax situation than if you were a taxpayer in the country of taxation. If there is no contract between your country and Singapore, you can still benefit from Singapore`s unilateral tax credits. Japan is one of Singapore`s strongest economic partners. In 2002, the signing of the Japan-Singapore Economic Partnership Agreement was an important milestone in relations between the two countries. It facilitated cross-border trafficking of people, goods, services, capital, information, etc. between states and strengthened cooperation in the trade sector by removing most tariffs on exports and imports. Close cooperation has led to the need to resolve the tax problems that arise in cross-border enterprises and the two states have concluded a double taxation agreement. Like any other DBA concluded by Singapore, its agreement with Japan contains information on how tax residency is set up, with a view to avoiding the levying of similar taxes on taxpayers operating in both countries. The deep economic integration between Singapore and Japan has led to tax regulation that would address the tax problems faced by cross-border businesses led by residents of both countries. In particular, the ability of both countries to tax the same income twice has led to regulation to avoid this situation. This article describes the agreement between Singapore and Japan on the prevention of double taxation (DBA), a fundamental instrument to solve this problem. If you are thinking of starting a business in Singapore that manages business with Japan, this article will be very important to you. Double taxation can be avoided if foreign income is exempt from national tax.
The exemption may be granted for all or part of the foreign income. Tax exemption on dividends from foreign sources, branch and service revenues – Section 13 (8) of the Singapore Income Tax Act A Singapore-based reporting company may benefit from tax exemptions on dividends from foreign sources, profits from foreign branches and income from foreign sources transferred to Singapore if the following conditions are met : The development of international trade and multinationals has increased the need to address the issue of double taxation.