The DBA provides for an exemption from double taxation where income is taxed in both Contracting States. In the case of Thailand, singapore tax, which must be paid for Singapore`s income, is allowed as a consideration of Thai tax payable on Singapore`s income. Thai tax payable on income from Thailand is taken into account as a consideration of Singapore tax payable on such income. The credit thus granted must not exceed the tax calculated before the credit of the country concerned. In the case of dividends paid by a Singapore company to a Thai company holding at least 25% of the voting rights of the paying company, such income may be exempt from Thai tax; However, Thailand applies a tax rate that would have been applicable to the remaining taxable income of the beneficiary had such an exemption not been granted. As a result, in the case of a beneficiary from Singapore, a thai tax credit that the company pays on the dividends received is taken into account. In 2019, the Monetary Authority of Singapore and the Thai Office of Insurance Commission signed a Memorandum of Understanding (MOU) to strengthen cooperation in the field of insurance supervision. This agreement promotes an effective partnership between insurance supervisors. The Memorandum of Understanding improves the framework for cooperation, exchange of information, assistance in insurance supervision between the two authorities and improves the infrastructure of the insurance system in both legal systems. In 2017, the Double Taxation Convention (DBA) between Singapore and Thailand entered into force and replaced the agreement that has been in force for more than thirty years.
The current agreement amends several outdated provisions, improving trade relations between the two countries. Prior to the current DBA, tax cooperation between Singapore and Thailand was governed by the Double Taxation Agreement. The Convention was concluded in 1975 and has served for more than 35 years as an effective fiscal mechanism to avoid double taxation. The current DBA amends the rules on cross-border tax rates and continues to encourage foreign investment. A full overview of the main changes that have come into force under the current version of the agreement can be found in the table below. Singapore and Thailand have a double taxation treaty that allows investors to benefit from double taxation relief in the situation where they receive income from both countries. The Convention on the Prevention of Double Taxation and the Prevention of Fiscal Evasion establishes the taxation rights of any jurisdiction applicable to corporate profits and other types of income. Singapore and Thailand are actively cooperating to improve economic relations between the two countries. Several joint projects and conventions – including the double taxation convention – implement it by improving cooperation in different areas such as trade, investment, culture and defence. Thailand and Singapore recognize the importance of these bilateral ties for the maintenance and development of their economies. The approach to avoiding double taxation of savings income is similar to the dividend approach described in the previous section.
Interest is taxed in the country where the beneficiary of the savings resides (i.e. country B). The list below highlights the main provisions of the Double Taxation Convention, from the taxes covered to the way a permanent establishment is defined in the Treaty and can therefore benefit from these tax reductions or exemptions. . . .