Singapore and Liechtenstein signed an Income Tax Treaty on 27 June 2013.
The treaty will come into force after the two countries exchange ratification instruments. The provisions of the treaty will have effect from 1 January of the calendar year next following that in which the agreement enters into force.
The definition of a permanent establishment includes the provision of services by an enterprise in the other contracting state through employees or other staff engaged for that purpose if the activities continue for at least 365 days in any fifteen month period.
In accordance with the treaty, the following withholding taxes will apply:
Dividends: 0%
Interest: 12%
Royalties: 8%
The payment of dividends, interest and royalties between the above two countries may therefore be subject to lower withholding tax.
The treaty contains an article on the exchange of tax information. The protocol to the treaty sets out in detail the information that should be disclosed by a contracting state when making an information request to the competent authority of the other contracting state. The treaty does not require the exchange of information on a spontaneous or automatic basis.
