Singapore and Uruguay signed a tax treaty on January 15, Singapore’s Inland Revenue Authority has announced.
The agreement clarifies the taxing rights of both countries from cross-border business activities, and minimizes the double taxation.
The agreement sets withholding tax rate on dividends of 5 percent if the beneficial owner is a company (other than a partnership) holding at least 10 per cent of the company paying the dividends. Withholding is set at a 10 percent rate in other cases.
Withholding on interest is generally set at 10 percent, with listed exceptions, such as when the beneficial owner of the interest is a state, where it is zero. Withholding on royalties is 5 percent of the gross amount of the royalties for the use of, or the right to use, copyright of literary, artistic or scientific work, including cinematograph films, films or tapes used for radio or television broadcasting. The rate is 10 percent in other cases.
The signing took place in Singapore between Ms Chiam Yah Fang, Chief Tax Policy Officer, Ministry of Finance and His Excellency Carlos Irigaray, Uruguay’s Ambassador to Singapore.
Agreement will enter into force only after it is ratified by both countries.