SINGAPORE Law and Practice Contributed by: Lee Woon Shiu and Cheung Kuan Swan (Catherine), DBS Private Bank
guidance noting that PE status depends on the facts and circumstances, including whether the employee has authority to conclude contracts or routinely performs critical functions for the busi - ness. Even where the foreign company has no tra - ditional physical office in Singapore, these employ - ees’ activities could create a taxable presence in Singapore for the foreign employer. 3.6 Other Income Singapore generally follows the principles of the OECD Model, although some types of income may be subject to specific domestic tax treatment or other nuances. • Gains from the Sale of Real Estate Property – these are generally treated as capital gains (and therefore not taxed). However, if IRAS deems the transac - tion to be an “adventure in the nature of trade”, the gains will be taxed as ordinary income. • Remittances of Foreign-Sourced Income – as Singapore operates a territorial tax system (with an exception for foreign-sourced income received in Singapore), the timing and manner of remittance can be crucial. Certain foreign-sourced income received in Singapore may be exempt if specific conditions are met (for example, where the income is received by a Singapore tax-resident company from a jurisdiction with a headline corporate tax rate of at least 15%, and the income was subject to tax there). • Pensions – in Singapore, pensions are generally treated as taxable income, although exemptions apply to specific types, such as government pen - sions and certain approved funds. • Trusts – income distributed from a trust in Sin - gapore can be subject to specific tax treatment, depending on the nature of the trust and the tax residency of its beneficiaries. Generally, a trust’s income is taxed at the trustee level, unless spe - cific exemptions apply or the trust is granted tax transparency. • Taxation at Trustee Level – under Singapore tax law, the income of a trust is typically treated as the statutory income of the trustee and is chargeable to tax on the trustee, usually at a flat rate of 17%. • Tax Transparency – the Comptroller of Income Tax may grant a trust “tax transparency” treatment.
In such cases, where beneficiaries are Singapore residents and are entitled to the trust income, they may be taxed on their share of the income at their personal income tax rates, unless specific exemp - tions and concessions apply to the income they receive. • Non-Resident Beneficiaries – for non-resident beneficiaries, tax on their share of entitlement or distribution of income is assessed and paid at the estate or trustee level. • Digital Economy Income – while Singapore has not implemented a Digital Services Tax, the exist - ing income tax framework applies to digital busi - nesses. IRAS provides guidance on how existing rules apply to newer business models in the digital economy, with a focus on the sourcing of income. 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B Singapore has consistently engaged in discussions and expressed support for the OECD/G20 Inclusive Framework on BEPS, and remains an active partici - pant in discussions related to Amount B. As of early 2026, the OECD is still working on finalising the spe - cific implementation details for Amount B, thus Sin - gapore has not yet implemented Amount B into its domestic legislation. There is indeed broad support for the objective of Amount B which is to simplify and streamline the application of the arm’s length principle for baseline marketing and distribution functions. This is aimed at reducing transfer pricing disputes and compliance burdens. Singapore typically integrates international standards into its domestic tax legislation but often with local adaptations to suit its specific economic and admin - istrative context. The city state is expected to adopt the OECD framework once it is finalised and widely adopted. Any potential adaptations or minor departures from the OECD framework would only become clear dur - ing the domestic legislative process once the OECD framework is finalised. However, based on Singapore’s
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