Singapore Witholding tax

Dear Sir




We refer to your email of 16/6/2010.




Your income derived from Singapore would not qualify for tax exemption under the Avoidance of the Double Taxation Agreement between Singapore and Malaysia, regardless of your presence in Singapore or whether the temporary project office mentioned in your email constitutes a fixed base in Singapore.




You may wish to note that where a Malaysian has a fixed base in Singapore, his income derived from Singapore would not qualify for tax exemption under Article 14 of the Avoidance of the Double Taxation Agreement between Singapore and Malaysia. In the absence of a fixed base, his Singapore income would be taxable under Article 13 of the tax treaty. This is because Article 14 is subject to the provisions under Article 13 of the tax treaty which provides that tax charged on the income shall not exceed 5% of the gross amount. That is, under Article 13, the gross Singapore income is subject to a final withholding tax of 15% though the Malaysian may claim for the reduced withholding tax rate of 5% under the Article by submitting a Certificate of Residence (item 6a under the withholding tax form) found in the link below:



http://www.iras.gov.sg/irasHome/page.aspx?id=854





Therefore, please advise the payer to comply with the withholding tax requirements found in the link below:



http://www.iras.gov.sg/irasHome/page.aspx?id=1216




http://www.iras.gov.sg/irasHome/page.aspx?id=3462





Please refer to the link below for Article 13 and 14 of the tax treaty:



http://iras.gov.sg/irasHome/uploadedFiles/Quick_Links/newsingaporemalaysiadta13feb2006.pdf







Yours sincerely,


Kazel Chong


Asst Mgr (Foreigner and Clearance)


for Comptroller of Income Tax


Fax No.: +65 6351 2707



http://www.iras.gov.sg/