Withholding tax is a mechanism to collect income tax from certain groups of non-residents and is an area often overlooked by businesses. With the rise of cross border transactions, it is therefore important for businesses to understand the practical application of withholding tax to avoid penalties and minimise their tax burden.
This webinar is designed specifically to give Accounting and Tax Professionals a practical knowledge of withholding tax. You will also learn about the concept of permanent establishment and gain a basic understanding of some articles in tax treaty. Personnel involved in tax compliance of the company and project costing will also find the webinar useful.
A Highlight of Key Areas:
Overview of withholding tax system
Who are non-resident companies and individuals
Transactions that are subject to withholding tax
- Applicable sections in Singapore Income Tax Act
- Rights-based approach for characterising software payments and payments for the use of or the right to use information and digitised goods
Exemptions and remissions
Withholding tax rate
- Singapore Income Tax Act
- Application of tax treaties
- Permanent establishment and implication to withholding tax
- Various articles in a tax treaty (eg business profits, royalties and interest articles , etc)
- Claiming exemptions or reduced rates under the tax treaties
- Certificates of residence
Permanent Establishment (“PE”)
- Definition of PE
- Types of PE
Withholding tax compliance and administration
- Timing of withholding and payment to IRAS
- Calculation
- Who bears the withholding tax
- When payment is in foreign currency
- Deductibility of withholding tax on interest borne by companies on behalf of non-residents
- Withholding tax forms
- Penalties for non-compliance
- Voluntary disclosure
Foreign tax credit
Case studies