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(Sep 16, 2009) The People's Republic of China (PRC) and Singapore signed two memoranda of understanding (MOU) on August 24, 2009. The two MOUs, on scientific and technological cooperation and on enhanced exchanges of civil servants for purposes of study visits, were inked during four days of high-level talks held in Singapore between the two sides. The science and technology MOU will address intellectual property rights issues that the closer cooperation will entail. The exchange agreement, which builds on the 2004 Singapore-China Foundation program to promote understanding between officials of the two countries, will double the number of officials pursuing master's degrees or shorter executive programs in the other country, to eight, each year. 2010 will mark the 20th anniversary of diplomatic ties between PRC and Singapore.
Singapore Deputy Prime Minister Wong Kan Seng and Chinese Vice-Premier Wang Qi-shan also co-chaired the Sixth China-Singapore Joint Council Meeting for Bilateral Cooperation, held on August 23. The Joint Council determines the agenda for economic cooperation between the two countries, which alternate as hosts of meetings. The August session was the first one to include a discussion of the impact of the global financial crisis.
Other key areas of cooperation, aside from science and technology, are encouragement of investment by Singapore companies in China's regional development, not just in the big cities, and enhancement of the PRC-Singapore Free Trade Agreement (FTA) signed in 2008. Wong stated that after it has been in effect for one year, the FTA should be reviewed, whereupon, he added, its enhancement can be considered. (Clarissa Oon & Lee Siew Hua, S'pore-China Deal to Deepen Tech Links, & Lee Siew Hua, S'pore Inks 2 MOUs, Tax Pact with China, both in THE STRAITS TIMES, Aug. 25, 2009, available at http://www.pmo.gov.sg/News/Transcripts/Prime+Minister/Singapore+China+de
In addition, the two countries signed a protocol amending their Double Taxation Agreement. First, the definition of "permanent establishment" was amended to specify more than "183 days" as the time within any 12-month period that creates a permanent establishment for an enterprise, eliminating the term "six months." Previously, under a controversial interpretation, the PRC had counted "any month during which some employees were in China for any period of time" as a month. (Singapore and China Sign Protocol to Double Tax Agreement, CLIENT UPDATE (Aug. 2009) [Rajah & Tann LLP], available at http://www.singaporelawwatch.sg/legal/ln2/rss/commentaries/63821.pdf?utm
_source=rss%20subscription&utm_medium=rss.) Second, in regard to PRC tax credit on dividends paid from Singapore, the 10% minimum of ownership interest formerly required has been increased to 20%. Third, the Protocol stipulates a withholding tax exemption on interest derived before January 1, 2011, from a tri-partite loan arrangement, signed before September 18, 2007, by the China International Trust and Investment Corporation, the head office of the Bank of China, and the head office of the Development Bank of Singapore. Fourth, there is no Exchange of Information clause in the Protocol as set forth in revised article 26 of the Model Tax Convention of the Organisation for Economic Co-Operation and Development (OECD). (Id.; see also Model Tax Convention on Income and on Capital (Condensed Version), OECD website, July 2008, available at http://www.oecd.org/dataoecd/14/32/41147804.pdf.)
The original PRC –Singapore Double Taxation Agreement, signed on April 18, 1986, in force from December 12, 1986, and amended by an Exchange of Notes signed on July 29, 1996, was superseded by a new agreement signed on July 11, 2007, at the 4th Singapore-China Joint Council for Bilateral Cooperation meeting. (Singapore-China Avoidance of Double Taxation Agreement (DTA), Singapore Ministry of Finance website, http://www.mof.gov.sg/Taxation/china_dta_factsheet.htm (last visited Sept. 9, 2009).)
|Author:||Wendy Zeldin More by this author|
|Topic:||International affairs More on this topic|
|Jurisdiction:||China More about this jurisdiction|
|Singapore More about this jurisdiction|
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Last updated: 09/16/2009