A protocol to the Singapore-India tax treaty entered into force on February 27, Singapore’s Inland Revenue Authority has announced.
One goal of the protocol, signed December 30, 2016, is to prevent tax treaty shopping and round tripping of funds in India. The protocol allocates the right to tax capital gains to the source country; thus, gains arising from a transfer of shares acquired on or after April 1 by a Singapore tax resident in an Indian company may be taxed in India.
The protocol also revises the Singapore-India tax treaty’s limitation of benefits clause and provides for relief from double taxation in transfer pricing cases. It is the third protocol to the Singapore-India tax treaty.
