The Second Protocol to the Singapore-Latvia double taxation agreement entered into force in August. The changes included in this second protocol target a reduced withholding tax rate as well as other beneficial provisions and aim to encourage economic cooperation between the two countries.
Foreign investors from Latvia can find that Singapore offers beneficial conditions for doing business and having a team of accountants in Singapore is a step that further simplifies the manner in which foreign investors conduct business.
Changes in the taxation principles under the DTA
Latvia and Singapore have ratified the latest changes included in a Protocol to the double taxation agreement. These include a reduction of the withholding tax rates for dividends, interest, and royalties as well as a provision to lengthen the threshold for the timeframe used to determine the presence of a permanent establishment in one of the two jurisdictions.
The Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income applies according to a set of principles. The most important ones are listed below:
- the Singapore tax: the DTA covers the income tax imposed in Singapore, which has a value of 17% (standard rate) and to which some exemptions apply according to the amount of chargeable income;
- the Latvia tax: the agreement applies both to the personal income tax and to the corporate income tax;
- the withholding tax: preferential, reduced withholding tax rates can be established as per the double taxation agreement;
- other taxes: the agreement also applies to any similar taxes that are to be imposed after the document is signed.
The accounting services in Singapore provided by our team for investors from Latvia will also take these provisions into consideration when providing tailored services. Investors can reach out to us for more detailed information about how the treaty applies in their case. You can also count on us for a specialized audit in Singapore.
The Singapore – Latvia DTA
The Latvia – Singapore DTA enhances the cooperation and cross-border investment conditions between the two countries and these ramifications are expected to further increase trade and economic flows.
Our accounting firm in Singapore works with foreign investors from Europe and other regions who start a business here. Please feel free to contact us if you are planning on engaging in cross-border investment between Latvia and Singapore.