On or about 1 Sep 2020, the Inland Revenue Authority of Singapore (IRAS) has published an Income Tax Advance Ruling Summary No. 10/2020 with regards to “Income tax issues relating to a foreign Limited Partnership”.
The Subject was whether
- B Limited Partnership (“B LP”) is a transparent entity for Singapore income tax purposes.
- The requirements for Singapore withholding tax on the interest payments made to B LP should depend on the tax residency status of the respective partners of B LP.
The Structure
The Characteristics of Singapore LP and Foreign LP
The Ruling
- Based on the characteristics of Foreign LP and the similarities to a Singapore Limited Partnership, B LP is tax transparent for Singapore income tax purposes.
- Withholding tax under section 45 of the Income Tax Act is applicable on the portion of the interest payments attributable to partners of B LP who are non-residents of Singapore. The tax residency status of the partners of B LP is to be determined on a year-by-year basis.
For more information about the ruling, please go to the IRAS website.
Source, IRAS, 3 Sep 2020