Singapore, Turkmenistan sign comprehensive tax treaty

Singapore today signed a tax treaty with Turkmenistan, the Inland Revenue Authority of Singapore has announced.

The treaty reduces withholding taxes on dividends to zero if the beneficial owner is a company other than a partnership which holds at least 25 percent of the capital of the company paying the divided. In other cases, withholding taxes on dividends is zero.

Withholding taxes on interest is reduced to 10 percent except it is exempt if the payer or payee is a government or if payment is guaranteed by a government.

Withholding taxes on royalties are reduced to 10 percent.

The treaty contains a modern “principal purposes” test to combat tax treaty shopping and provisions on exchange of information for tax purposes. Moreover, the treaty provides for arbitration of unresolved cross border tax disputes.

The Singapore, Turkmenistan tax treaty will enter into force after ratification by both countries.