Is Singapore losing its investment shine?
Recent revisions to a double tax avoidance agreement between India and Singapore have left investors in the Republic disappointed.
ON Dec 30, 2016, just when the world was getting into a celebratory mood to usher in the New Year, India and Singapore announced the signing of a new Protocol amending the existing Double Tax Avoidance Agreement (DTAA) between the two countries.
In the recent past, India has been actively going against black money and attacking it vigorously from all sides. First, it amended the India-Mauritius DTAA, then came the demonetisation and now, the amendment to the India-Singapore DTAA. The amendment to the DTAA was widely anticipated and expected the moment the DTAA between India and Mauritius was amended to tax capital gains.
However, there were significant expectations among the investor community that India may offer Singapore more benefits than Mauritius while negotiating the amendment to the DTAA. This expectation was on the basis that Singapore is a larger trading partner than Mauritius and hence there should be something more to offer to Singaporean investors and tax residents. However, the Protocol to amending the DTAA between India and Singapore has put Singapore on a par with Mauritius and, in certain scenarios, worse than Mauritius and this has definitely been a disappointment to the investor community in Singapore.
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