Singapore and Ethiopia signed on August 24 a double tax agreement that will cap withholding tax rates on dividends, interest, and royalties.
The agreement was signed in Singapore between Singapore’s Minister for Trade and Industry, S Iswaran, and Ethiopia’s Minister of Foreign Affairs, Tedros Adhanom.
Under the deal, the withholding tax rate for dividends, interest, and royalties would be capped at five percent. The agreement includes a mutual agreement procedure to resolve double tax disputes, and includes provisions for the exchange of tax information in line with international standards.
Singapore’s Finance Ministry said in a statement: “The agreement clarifies the taxing rights between Singapore and Ethiopia on all forms of income flows arising from cross-border business activities, and minimizes the double taxation of such income. This will lower barriers to cross-border investment and boost trade and economic flows between both countries.”
The agreement will enter into force after its ratification by both countries.