Featured

Singapore denies unequal benefits in tax agreement with Indonesia

The Finance Ministry disputes the claim Singapore benefits unfairly in a tax agreement with neighbouring country Indonesia.

SINGAPORE – As reported by TODAY Singapore, Singapore’s Finance Ministry has responded to a news report courtesy of CNBC Indonesia, which quoted a tax expert who argued Article 11(3) of the Singapore-Indonesia Avoidance of Double Taxation Agreement (DTA) benefits Singapore more so than the agreement does Malaysia.

The Finance Ministry denies these claims wholesale: “it is not true that the DTA indulges Singapore.”

“Provisions under the DTA are reciprocal, like any other DTA. So, under Article 11(3), Singapore tax residents are exempted from Indonesian tax on interest income derived from bonds issued by the Indonesia government, and are taxable only in Singapore”

– Finance Ministry

The Finance Ministry went on to clarify, “Similarly, Indonesian tax residents are exempted from Singapore tax on interest income derived from Singapore government bonds and are only taxable in Indonesia.”

Article 11(3) itself, according to the Finance Ministry, was written to encourage investments between the two countries, not benefit any individual nation unfairly.

The news report cited an untamed state official who claimed Indonesians were using the DTA as a means to avoid taxes at home. Responding to this supposed illegal activity, the Finance Ministry said “[they] will not hesitate to take firm action against cross-border tax evasion,” taking a firm stance against any would be a misuse of the DTA.

Aside from the recent report the Finance Ministry disputes, the Ministry affirms its “robust tax cooperation” with Indonesia and promises to continue legislating policies with ideas of fairness and transparency in mind.

Most Popular

To Top