A new law will come into force tomorrow to help minimise the burden of double taxation of income of investors from Singapore and Kazakhstan

The Ministry of Finance said this will be implemented following the completion of ratification formalities.

The provisions of the Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income between Singapore and the Republic of Kazakhstan will cover income derived on or after January 1 next year.

This will help to facilitate the cross-flow of trade, investment, and financial activities as well as the technical know-how between the two countries.

The main terms under the Agreement include withholding tax rate of 5 per cent or 10 per cent on dividends (depending on circumstances) while withholding tax rate of 10 per cent will be imposed on interest and royalties.

Also, if a Singapore resident company received dividends from a Kazakhstan resident company, tax credit for the Kazakhstan tax on that portion of the profits out of which the dividends are paid will be allowed, provided that the Singapore resident company owns at least 10 per cent of the share capital of the company resident in Kazakhstan.

For more information, the full text of the Agreement will be published tomorrow in the Government Gazette and will also be available on the website of the Inland Revenue Authority of Singapore at www.iras.gov.sg.