When the following specified nature of payments paid to non-resident companies by a person attracts withholding tax. The rate of withholding tax will depends on nature of these payments:
- Interest, commission, fee in connection with any loan or indebtedness;
- Royalty or other payments for the use of or the right to use any movable property;
- Payments for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information;
- Payments of management fees;
- Rent or other payments for the use of any movable property;
- Payments for the purchase of real property from a non-resident property trader;
- Structured products (other than payments which qualify for tax exemption under section 13(1)(zj) of the Income Tax Act);
- Distribution of real estate investment trust (REIT).
It was noted that most of these payments has been covered under Sections 12(6) and Section 12(7) of the Income Tax Act.
On 23 July 2018, the Inland Revenue Authority of Singapore (IRAS) has updated content of the following on its website to reflect the recent mutual agreement between Singapore and Australia:
- the flowcharts on the ‘General Overview of Withholding Tax on Income Deemed to be Sourced in Singapore under Sections 12(6) and 12(7) of the Income Tax’,
- the “Payments Made for Management Services or Assistance in the Management of Business”, and
- the FAQ section on ‘Services’
Source: IRAS, 25 July 2018