The income tax treaty between Singapore and Qatar, signed on 28 November 2006, entered into force on 5 October 2007 and applies from 1 January 2008. The treaty was concluded in the English and Arabic languages, both texts having equal authenticity. The treaty generally follows the OECD Model Convention.
Dividends are taxable only in the state of residence of the recipient.
The maximum rates of withholding tax are:
|-||5% on interest, subject to exceptions in respect of interest derived by the governments of the contracting states; and|
|-||10% on royalties.|
Deviations from the OECD Model include:
|-||a permanent establishment (PE) includes (i) premises used as sales outlet, and (ii) a farm or plantation;|
|-||assembly project, or supervisory activities connected therewith, but only where such site, project or activities lasts for more than 6 months, and (ii) the furnishing of services, including consultancy services, through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) for period(s) of more than 183 days in any 12-month period;|
|-||an insurance enterprise of a state, except in regard to reinsurance, is deemed to have a PE in the other state if it collects premiums or insures risks in that other state through a person, other than an agent of an independent status;|
|-||when the activities of an agent are devoted wholly or almost wholly on behalf of the enterprise through which it carries on business, and conditions are made or imposed between the enterprise and the agent in their commercial and financial relations which differ from those which would have been made between independent enterprises, the agent will not be considered as an independent agent; and|
|-||the profits from the operation of ships or aircraft in international traffic includes (i) profits from the rental on a bareboat basis of ships or aircraft, (ii) profits from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers), used for the transport of goods or merchandise, and (iii) interest on funds connected with the operations of ships or aircraft in international traffic.|
Both states generally provide for the credit method to avoid double taxation, with a credit in Singapore for underlying tax where dividends are paid to a company that owns not less than 10% of the share capital of the paying company. In addition, both states provide for mutual tax sparing relief for the first 10 years from the effective date of the treaty.
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