The Government of the Republic of Singapore and the Government of the United Kingdom (“UK”) of Great Britain and Northern Ireland today signed a protocol amending the Agreement for the avoidance of double taxation (“DTA”).

The protocol marks the third agreement Singapore has signed that incorporates the new internationally agreed Standard for the exchange of information upon request for tax purposes, as part of the comprehensive renegotiation of the Singapore-UK DTA. The signing took place in Singapore between Minister for Finance, Mr Tharman Shanmugaratnam, and the UK’s Financial Secretary to the Treasury, the Rt. Hon Stephen Timms MP.

Minister Tharman said that *“Singapore has a long-standing and close relationship with the UK. We are pleased to further strengthen our relationship with the signing of this protocol to incorporate the new international Standard into our DTA with each other, and that the UK is amongst the first of several jurisdictions with which Singapore will be doing so.”*

Affirming the significance of this agreement, Financial Secretary the Rt. Hon. Stephen Timms, MP said: *“Britain is the largest foreign investor in Singapore and 80% of Singapore’s investments in the European Union go into the UK. So I warmly welcome Singapore’s decision to adopt the OECD Standard for the Exchange of Information for tax purposes. Singapore’s firm commitment to transparency and exchange of information is very encouraging, and I call on others to follow their example.”*

Also signed today was a Second Protocol to the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on income (DTA) with the Government of the People’s Republic of China. The signing took place in Singapore between Mr Wang Li, Deputy Commissioner of the State Administration of Taxation, People’s Republic of China, and Mr Moses Lee, Commissioner of Inland Revenue Authority of Singapore.

This Protocol makes certain amendments to the current DTA between the two countries, specifically on Article 5 (Permanent Establishment), Article 11 (Interest) and Article 22 (Elimination of Double Taxation).

On August 21, Singapore signed a revision to its agreement with New Zealand. The double tax agreements incorporate the new internationally agreed standard for the exchange of information. The first agreement Singapore signed that incorporated the standard was with Belgium. One change under the revised DTA with New Zealand is lower withholding tax rates for dividends, interest and royalties, which are 15% under the existing DTA. The new withholding tax rates for interest and royalties are 10% and 5% respectively, while the withholding tax rates for dividends are 5% or 15%, depending on the shareholding structure.

The New Zealand DTA also redefines permanent establishment to incorporate a building site, a construction, installation or assembly project if it lasts more than 12 months, instead of six months in the existing agreement.

In March 2009, Singapore endorsed the new internationally agreed Standard for the exchange of information for tax purposes. Since then, it has been renegotiating existing DTAs and negotiating new DTAs with numerous jurisdictions (including OECD countries) on the basis of ensuring a mutual balance of benefits. Several of these have progressed sufficiently with the agreements already initialled and expected to be formally signed within the next few months.