The Dou­ble Tax­a­tion Agree­ment fa­cil­i­tates Nor­we­gian in­vest­ments in Sin­ga­pore

Norway-Asia Business Review - - Contents -

“Ef­fec­tively these agree­ments are in­tended to fur­ther in­ter­na­tional/ cross bor­der trade and in­vest­ment,” ex­plains Are Zachari­assen, Part­ner, Wik­borg, Rein & Co. Ad­vokat­firma DA, lo­cated in Oslo. “Both Nor­way and Sin­ga­pore are small and open economies de­pen­dant on in­ter­na­tional trade and the en­ter­ing into of the agree­ment has eased such trade and in­vest­ment be­tween the two coun­tries.

The dou­ble tax agree­ment be­tween Nor­way and Sin­ga­pore is based on the OECD Model Tax Con­ven­tion, and both Nor­way and Sin­ga­pore have en­tered into ap­prox. 90 such dou­ble tax agree­ments with different coun­tries – most of them based on the Model Con­ven­tion.

“From the per­spec­tive of Nor­we­gian in­vestors and busi­nesses the key point is the use of the ex­emp­tion method for div­i­dends re­ceived by a Nor­we­gian com­pany from a Sin­ga­pore com­pany where it holds a qual­i­fy­ing share­hold­ing (i.e at least 25 per­cent),” ex­plains Are Zachari­assen. “Such div­i­dend is tax ex­empt in Nor­way re­gard­less of the ef­fec­tive tax rate and busi­ness of the dis­tribut­ing Sin­ga­pore com­pany, which is very un­usual when com­par­ing with the other dou­ble tax agree­ments Nor­way has en­tered into.”

Ac­cord­ing to Are Zachari­assen, the dou­ble tax agree­ment in prin­ci­ple ben­e­fits all cross bor­der in­vest­ments and in­vestors, as well as in­di­vid­u­als, ex­pats etc. who work and/or in­vest in both Sin­ga­pore and Nor­way. “But in a tax plan­ning and op­ti­mi­sa­tion con­text the tax ex­emp­tion for div­i­dends is of course es­pe­cially at­trac­tive,” says Are Zachari­assen.

The ex­is­tence of a dou­ble tax agree­ments is a good thing, thinks Are Zachari­assen. “I would say all cross bor­der in­vestors and in­di­vid­u­als ben­e­fit from the ex­is­tence of the agree­ment. And quite a num­ber of com­pa­nies ben­e­fit from the spe­cific div­i­dend tax ex­emp­tion, al­though I do not know how many.”

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