🇸🇬 Singapore — 🇮🇳 India

Tax Treaty / Double Tax Avoidance Agreement detail

The India-Singapore Comprehensive Double Taxation Avoidance Agreement was signed in 1994 and entered into force in the same year. Like the India-Mauritius treaty, it historically contained capital gains provisions that attracted significant foreign investment routing, and like Mauritius, it was amended by a protocol in 2016 to curtail treaty shopping. Following the 2016 protocol (effective 1 April 2017), capital gains from Indian shares acquired on or after that date are taxable in India. Gains on shares acquired before 1 April 2017 are grandfathered, and investments made between 1 April 2017 and 31 March 2019 qualified for 50% tax relief on gains during a transition period. These changes mirror the simultaneous amendment of the Mauritius treaty. Dividends are subject to 10% withholding where the beneficial owner is a company owning at least 25% of the paying company's shares; 15% applies to other dividends. Interest withholding is capped at 10% for banks and 15% for other qualifying interest payments. Royalties face 10% withholding, covering payments for the use of industrial, commercial, and scientific equipment as well as intellectual property. The 2016 protocol introduced a Limitation on Benefits provision requiring Singaporean companies to demonstrate substance: total expenditure on operations in Singapore must exceed SGD 200,000 (approximately USD 150,000) per year to qualify for treaty benefits. This effectively prevents brass-plate companies from accessing reduced rates. Singapore's territorial tax system and its extensive network of investment guarantees make it a substantive base for Asia-Pacific holding structures that can now legitimately access the treaty's provisions. Capital gains on investments other than shares—such as debentures and derivatives—and certain other income categories follow separate rules under both domestic laws and the treaty.