Singapore and Barbados signed their first income tax treaty On 15 July 2013.The provisions of the treaty generally follow the provisions of the OECD Model Tax Convention but a permanent establishment is created if services are provided in the other contracting state through employees and other staff engaged for the purpose and the activities continue in the other contracting state for at least 365 days in a 15 month period.ri
The treaty provides for dividends to be taxed only in the country of residence of the recipient. Under the treaty the maximum withholding tax on interest is 12% and on royalties 8%. The treaty also contains provisions on non-discrimination, the exchange of information and a mutual agreement procedure.
This treaty will become effective in the case of Barbados, on or after 1 January following the year in which the treaty enters into force on the basis exchanging notifications of ratification. In the case of Singapore, the Treaty will be effective in respect of tax chargeable for any year of assessment beginning on or after 1 January in the second calendar year following the year in which the Treaty enters into force.
