India`s Double Taxation Avoidance Agreement With Singapore

What is a shell company? A shell company is a legal enterprise that is either “established” in Singapore, India, but has negligible activities in the state without continuous activity. According to the India-Singapore DBA, a resident based in one of the two countries will be a shell company if, in the 24 months immediately preceding the date on which the company`s profits are generated, the total annual expenses for its operation. B, for example, services provided in connection with a facility or structure used for the exploration or exploitation of natural resources covered by Article 5, paragraph 2, point j), are provided; (d) if he is a national of either state or one, the competent authorities of the contracting states resolve the matter by mutual agreement. 3. Articles 15, 16 and 19 apply to allowances and pensions for services provided in connection with an activity carried out by a contracting state or a political sub-direction or a local authority or legal body. The Double Taxation Avoidance Agreement (DBA) between India and Singapore is a tax treaty between two countries to avoid double taxation of income that can flow between the two countries. Dividends Prior to April 1, 2020, India did not apply withholding tax on dividends. However, the dividend company bears a dividend distribution tax (DDT) of 15% (plus surtax and tax) when the dividend is distributed to its shareholders. The beneficiary shareholder is exempt from paying a dividend tax. So today, shareholders in India do not pay tax on dividends, but the company pays tax. 9. A business in a contracting state is not considered a stable institution in the other contracting state solely because it acts in that other state through a broker, general agent or other agent with an independent function, provided that they act properly.

However, where the activities of such a representative are entirely or almost devoted to that undertaking itself or to the law of that company and other companies controlled by that company or subject to the same common control as the latter, he is not considered an agent with independent status within the meaning of this paragraph. Income Tax Act, 1961: Communication by Section 90: Convention between the Government of the Republic of India and the Government of the Republic of Singapore to avoid double taxation and prevention of tax evasion with respect to income tax iii) any remuneration that is five hundred dollars per month or its counter-value in national currency for services provided in that other state , as part of his studies, research or training, or is necessary for his maintenance. 8. For the purposes of paragraph 1, the term “directly or indirectly unthinkable to a stable establishment” covers the profits generated by the transactions in which the institution participated and those profits are considered to be related to the stable establishment, to the extent that the division of those operations is appropriate, even if these transactions are carried out directly at the foreign office of the company and not at the institution. 7. Where profits contain revenue elements that are treated separately in other sections of this agreement, the provisions of this section are not affected by the provisions of this section.