On 15 July 2013, the Income Tax Treaty between Barbados and Singapore was signed, in Singapore. The treaty will enter into force when the ratification procedures have been completed.
Under the treaty a permanent establishment will exist if a building site, construction, assembly or installation project or supervisory activities continue for at least twelve months. A permanent establishment will also be created by the furnishing of services in the other contracting state through employees or other staff engaged for the purpose if the activities continue in the other state for at least 365 days in a 15 month period.
Under the provisions of the treaty no withholding tax is to apply to the payment of dividends. The maximum withholding tax on interest is 12%, with an exemption for interest paid to the government of the other state. A maximum 8% withholding tax rate is to apply to royalty payments.
The agreement also includes articles in respect of non-discrimination, exchange of tax information and a mutual agreement procedure in the event of tax disputes.
