When you earn foreign income from a treaty country, you may be subject to tax in that foreign country. However, you may wish to claim the DTA benefits that entitle a Singapore tax resident to enjoy a reduced tax rate or a tax exemption in that foreign country.

To enjoy this benefit, you need to submit the Certificate of Residency (COR) to the foreign tax authority to prove that you are a Singapore tax resident.

A company is tax resident in Singapore if its control and management—that is, strategic decision-making by its Board of Directors—takes place in Singapore. This is usually determined by where board meetings are held, not AGMs, which involve shareholders rather than directors.

“Control and management” covers key decisions such as setting policies, approving accounts, appointing management, raising finance, declaring dividends, and major corporate actions. The location of board meetings is the main indicator of where this control is exercised.

For virtual board meetings, a company is generally considered Singapore-resident if at least half of the decision-making directors or the Board Chairman are physically in Singapore during the meeting.

• At least 50% of the directors (with the authority to make strategic decisions) are physically in Singapore during the meetings; or

• Chairman of the Board of Directors (if the company has such an appointment) is physically in Singapore during the meeting.

The basis of taxation for a resident company and non-resident company is generally the same. However, there are some benefits that a resident company can enjoy that a non-resident would not. These include:

• It is entitled to benefits conferred under the Avoidance of Double Taxation Agreements (DTA) that Singapore has concluded with treaty countries.

• It can enjoy tax exemption on foreign-sourced dividends, foreign branch profits, and foreign-sourced service income under section 13(8) of the Income Tax Act.

To support Singapore tax residency, a company should hold most board meetings in Singapore to show that key decisions are made there. It also helps if directors are based in Singapore and the company’s records are kept locally. The location of trading or operations does not determine tax residency.

Generally, a Singapore branch of a foreign company is not treated as a Singapore tax resident since the control and management is vested with an overseas parent company.

When filing Singapore income tax returns, a company must show where its control and management is exercised. Tax residency can vary year to year, so concrete evidence is needed each year to support Singapore tax resident status.

When filing Singapore tax returns, a company must declare where its control and management is exercised. Tax residency can change yearly, so evidence must be provided each year to confirm Singapore resident status.

A Double Taxation Agreement (DTA) is a treaty between Singapore and another country that prevents the same income from being taxed twice. It outlines how each country may tax different types of cross-border income and may grant tax exemptions or reductions. Only tax residents of Singapore and the treaty partner country can benefit from a DTA.