Netherlands-Singapore DTAA: Tax Treaty Guide with Examples
The Singapore–Netherlands Double Taxation Avoidance Agreement (DTAA) is a bilateral tax treaty that helps prevent individuals and businesses from being taxed twice on the same income in both countries. Originally signed in 1971 and updated through multiple protocols and the OECD’s Multilateral Instrument (MLI), the agreement strengthens economic cooperation, supports cross-border investments, and enhances tax transparency between Singapore and the Netherlands.
This guide is designed for tax residents of Singapore or the Netherlands who earn income across borders. It also applies to companies operating between Singapore and the Netherlands, helping them better understand their tax obligations and potential reliefs under the DTAA.
We explain how various types of cross-border income, such as business profits, dividends, interest, royalties, capital gains, and employment income are treated under the treaty. Each section includes real-world examples and simplified tax calculations to illustrate how the Singapore–Netherlands DTAA applies in different scenarios.
If you’re planning to set up a business in Singapore or expand your operations from the Netherlands, explore our detailed Singapore Company Registration Guide to learn how to register a company and meet ongoing compliance requirements.
This article covers the following topics of the Singapore-Netherlands DTAA:
- Purpose & Scope of the Agreement
- Key Terms
- Tax on Business Profits
- Tax on Dividends
- Tax on Interest Income
- Tax on Royalties
- Tax on Personal Services
- Tax on Director Fee
as well as
Netherlands-Singapore DTAA: Purpose & Scope
What is Covered
The Netherlands–Singapore tax treaty applies to taxes on income and capital imposed by either country such as income tax, wages tax, company tax, dividend tax, tax on director fees, and capital tax.
Who is Covered
The agreement applies to any “person” who is a tax resident of either Singapore or the Netherlands. This includes individuals, companies, and other legal entities that are liable to tax in their respective countries based on criteria such as domicile, residence, place of management, or incorporation.
A person must qualify as a resident under domestic tax law to benefit from the treaty. If a person qualifies as a resident in both countries, the DTAA’s tie-breaker rules (Article 3) will determine which country has the primary right to treat them as a resident for tax purposes.
The treaty applies to a wide range of income sources, such as business profits, dividends, interest, royalties, capital gains, employment income, directors' fees, professional services, dependent personal services, as well as government pensions and scholarships.
To understand how the treaty applies in real-life scenarios, it’s important to assess how it works alongside the Singapore Tax System, particularly in relation to domestic filing obligations and relief mechanisms. Factors such as corporate residency, tax exemption schemes, and eligibility for foreign tax credits all depend on how Singapore interprets taxable income under its laws. For a broader understanding of these rules, see our guides on Singapore Corporate Tax policies for businesses, and Singapore Personal Income Tax regulations for individuals working or earning across borders.
Netherlands-Singapore DTAA: Key Terms Defined
Person
Tax Resident
Permanent Establishment (PE)
Withholding Tax
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Netherlands–Singapore DTAA: Tax on Business Profits
How business profits are taxed under the treaty
DTAA Rule
According to Article 7 of the Netherlands–Singapore DTAA, business profits are taxable only in the country where the enterprise is a tax resident, unless the business is carried out through a Permanent Establishment (PE) in the other country. If a PE exists, the other country may tax only the portion of profits that is attributable to that PE.
This provision reflects international tax norms and is particularly relevant for companies operating in both jurisdictions. The existence of a PE can trigger local tax obligations under both the Singapore tax system and Netherlands corporate tax law.
Example 1: Singapore Company Earning from the Netherlands (No PE in the Netherlands)
A Singapore-resident company earns S$500,000 from providing consulting services to Dutch clients. The company does not maintain a fixed place of business, staff, or agents in the Netherlands.
- DTAA application: No PE in the Netherlands, so only Singapore has the right to tax the income (Article 7 paragraph 1).
- Taxation: The entire income is taxed in Singapore under the corporate tax regime (currently at a headline rate of 17 percent). The Netherlands does not impose any tax.
- Withholding tax: No Dutch withholding tax applies, since this is business income and not passive income such as interest or royalties.
Example 2: Singapore Company Earning from the Netherlands (With PE in the Netherlands)
The same Singapore company sets up an office in Amsterdam with staff to support its Dutch clients. The office qualifies as a PE under Article 4 of the treaty.
- DTAA application: The Netherlands has the right to tax the income attributable to the PE (Article 7 paragraphs 1 and 2).
- Taxation: If S$200,000 of the S$500,000 is attributable to the Dutch PE, it will be subject to Netherlands corporate tax (currently 25.8 percent on profits above €200,000).
- Singapore relief: The company can claim a foreign tax credit under Singapore’s domestic law or Article 24 of the DTAA to avoid double taxation.
Example 3: Netherlands Company Earning from Singapore (No PE in Singapore)
A Netherlands-resident software company earns S$500,000 from Singapore clients by delivering services remotely. It has no office, employees, or dependent agents in Singapore.
- DTAA application: No PE in Singapore, so only the Netherlands can tax the income.
- Taxation: Income is taxed under the Netherlands corporate tax system.
- Singapore tax: Singapore does not impose tax on the Netherlands company. No Singapore withholding tax applies.
Example 4: Netherlands Company Earning from Singapore (With PE in Singapore)
The same Dutch company establishes a branch office in Singapore to serve Southeast Asian clients. The office qualifies as a PE under Singapore domestic law and the DTAA.
- DTAA application: Singapore has taxing rights over the portion of profits attributable to the PE.
- Taxation: Suppose S$300,000 of the total S$500,000 profit is attributable to the Singapore PE. This amount is subject to Singapore corporate tax at the prevailing rate.
- Netherlands relief: The Dutch company may claim double tax relief in the Netherlands under Article 24.
Netherlands–Singapore DTAA: Tax on Dividends
How dividends are taxed under the treaty
DTAA Rule
The treatment of dividend income is addressed in Article 10 of the Netherlands–Singapore DTAA. Under this provision, dividends may be taxed in the country of residence of the recipient. However, the source country (i.e. the country where the company paying the dividend is located) may also impose a tax on the dividend, subject to specified limits.
- If the dividend is paid by a Netherlands company to a Singapore resident, the Netherlands may tax it at a maximum rate of 15 percent, unless the Singapore recipient company owns at least 25 percent of the paying company’s capital. In such a case, the dividend is exempt from Netherlands withholding tax.
- If the dividend is paid by a Singapore company to a Netherlands resident, no Singapore withholding tax applies, as Singapore does not impose tax on dividends under its domestic law.
These rules are subject to the condition that the recipient does not have a permanent establishment in the source country that is effectively connected with the shares. If such a connection exists, the dividend is taxed as part of business profits under Article 7.
Example 1: Dividend Paid by a Singapore Company to a Netherlands Resident
A Netherlands individual holds S$500,000 worth of dividends from a Singapore-listed company.
- DTAA application: The Netherlands has the right to tax the dividends as the recipient’s country of residence (Article 10 paragraph 1).
- Singapore withholding tax: None, as Singapore does not impose dividend withholding tax.
- Taxation: The Netherlands taxes the dividend under its domestic rules for foreign-sourced income. A foreign tax credit is not necessary since no Singapore tax is levied on the dividend.
Example 2: Dividend Paid by a Netherlands Company to a Singapore Resident (Individual)
A Singapore-resident individual receives S$500,000 in dividends from a Dutch public company. The individual owns less than 25 percent of the Dutch company.
- DTAA application: The Netherlands may impose a withholding tax of up to 15 percent on the gross dividend (Article 10 paragraph 2).
- Singapore taxation: Singapore does not tax foreign-sourced dividends received by individuals, provided they are not received through a Singapore partnership or trade.
- Relief: The Netherlands tax is final; no additional Singapore tax applies.
Example 3: Dividend Paid by a Netherlands Company to a Singapore Company (Owns at least 25%)
A Singapore company holds a 30 percent shareholding in a Netherlands subsidiary and receives S$500,000 in dividends.
- DTAA application: Under Article 10 paragraph 2, the dividend is fully exempt from Netherlands withholding tax, since the Singapore recipient company holds at least 25 percent of the Dutch company's capital.
- Singapore taxation: The dividend is tax-exempt in Singapore if it qualifies for foreign-sourced dividend exemption, which requires that the dividend is received in Singapore and subject to tax of at least 15 percent in the source country or the Comptroller is satisfied with the exemption claim.
- Planning note: No foreign tax credit is needed, since no tax was paid in the Netherlands due to the 25 percent shareholding exemption.
Netherlands–Singapore DTAA: Tax on Capital Gains
How capital gains are taxed under the treaty
DTAA Rule
The tax treatment of capital gains is covered under Article 14 of the Netherlands–Singapore DTAA. The allocation of taxing rights depends on the nature of the asset disposed of and whether a permanent establishment exists in the source country.
Here is a summary of the applicable rules:
- Gains from the sale of immovable property may be taxed in the country where the property is located.
- Gains from the sale of movable property forming part of a permanent establishment may be taxed in the country where the PE is situated.
- Gains from the sale of ships and aircraft operated in international traffic are taxable only in the country where the seller is a resident.
- Gains from the sale of other property, including shares, are generally taxable only in the seller’s country of residence.
- However, two important exceptions apply:
- If a person owns 25 percent or more of the share capital of a company that holds mainly immovable property, the country where the immovable property is located may tax the gain from the share sale.
- If a former resident of either country sells shares within five years of ceasing residence, the former country may retain the right to tax the capital gain.
Example 1: Sale of Netherlands Shares by a Singapore Resident
A Singapore-resident investor sells shares in a Dutch operating company for a gain of S$500,000. The company is not a real estate holding company.
- DTAA application: The gain is taxable only in Singapore as the seller’s country of residence (Article 14 paragraph 4).
- Netherlands tax: None, as the company is not a property-rich entity and the investor is not a recent former Dutch resident.
- Singapore tax: Singapore does not tax capital gains under its domestic law. The gain is fully exempt.
Example 2: Sale of Singapore Shares by a Netherlands Resident
A Netherlands-resident investor sells shares in a Singapore technology company and realises a gain of S$500,000.
- DTAA application: The gain is taxable only in the Netherlands (Article 14 paragraph 4).
- Singapore tax: No tax is imposed in Singapore, as capital gains are not subject to tax under the Singapore tax system.
- Netherlands tax: The gain is taxed under Dutch capital gains rules, if applicable.
Example 3: Sale of Shares in Property-Rich Netherlands Company by a Singapore Resident
A Singapore-resident individual sells shares in a Dutch company whose primary asset is a commercial property in Amsterdam. The individual owns 30 percent of the company.
- DTAA application: The Netherlands may tax the gain (Article 14 paragraph 5).
- Netherlands tax: The gain may be subject to Dutch capital gains tax under domestic law, depending on the classification of the company and the residence status of the seller.
- Singapore tax: No capital gains tax applies. If tax is paid in the Netherlands, the Singapore resident may not be eligible for foreign tax credit under domestic rules, as Singapore does not tax the gain.
Example 4: Exit Tax for Recent Former Netherlands Resident
An individual who was a Netherlands resident and moved to Singapore two years ago sells shares in a Dutch holding company for a S$500,000 gain.
- DTAA application: Article 14 paragraph 6 allows the Netherlands to tax gains on the sale of shares if the individual was a Dutch resident at any time during the past five years.
- Netherlands tax: The Netherlands may impose an exit tax under its domestic anti-abuse rules.
- Singapore tax: No tax applies.
Netherlands–Singapore DTAA: Tax on Interest Income
How interest income is taxed under the treaty
DTAA Rule
Interest income is addressed under Article 11 of the Netherlands–Singapore DTAA. As a general rule, interest arising in one country and paid to a resident of the other country may be taxed in both countries:
- The recipient's country of residence may tax the interest as part of the taxpayer’s income.
- The source country may also impose a withholding tax, but it is limited to 10 percent of the gross amount (Article 11 paragraph 2).
- However, if the interest is paid to the Government of the other country, including public bodies such as Singapore’s Board of Commissioners of Currency, it is fully exempt from tax in the source country (Article 11 paragraph 3).
If the interest is effectively connected to a permanent establishment in the source country, it is not taxed under Article 11 but under Article 7 (Business Profits).
Example 1: Interest Paid by a Singapore Company to a Netherlands Resident
A Netherlands-resident individual receives S$100,000 in interest from a loan provided to a Singapore company.
- DTAA application: Singapore may impose a withholding tax of up to 10 percent (Article 11 paragraph 2). This is in line with the Singapore withholding tax rate on interest to non-residents.
- Taxation: Singapore withholds S$10,000. The Netherlands taxes the full S$100,000 under its domestic tax law.
- Relief: The Netherlands allows a foreign tax credit for the S$10,000 tax paid in Singapore, as provided under Article 24 of the DTAA.
Example 2: Interest Paid by a Netherlands Company to a Singapore Resident
A Singapore company receives S$100,000 in interest income from a loan extended to a Dutch borrower.
- DTAA application: The Netherlands may impose a withholding tax of up to 10 percent under Article 11.
- Netherlands tax: A withholding of S$10,000 is applied.
- Singapore tax: The interest is taxable in Singapore. However, the Singapore company may claim a foreign tax credit for the Netherlands withholding tax, reducing its effective tax burden.
Example 3: Interest Effectively Connected to a Permanent Establishment
A Dutch company operates a PE in Singapore and earns S$100,000 in interest income through that establishment.
- DTAA application: Article 11 does not apply. The interest is taxed under Article 7 (Business Profits), since it is attributable to a Singapore PE.
- Singapore tax: The full S$100,000 is taxed at corporate tax rates.
- Netherlands tax: No tax is imposed, but the company may be able to claim a tax credit for Singapore tax paid under Dutch law.
Netherlands–Singapore DTAA: Tax on Royalties
How royalty income is taxed under the treaty
DTAA Rule
The treatment of royalties is governed by Article 12 of the Netherlands–Singapore DTAA. The default rule under this article is that royalties are taxable only in the recipient’s country of residence, not in the country from which the royalty payment arises.
This means that:
- Singapore does not impose withholding tax on royalty payments made to Netherlands residents, if the payment qualifies under the treaty.
- The Netherlands does not impose withholding tax on royalties paid to Singapore residents under the same condition.
- If the royalties are effectively connected to a permanent establishment in the source country, Article 7 (Business Profits) applies instead.
Importantly, the treaty explicitly excludes from protection royalties related to literary or artistic copyrights, including motion pictures, television or broadcasting content. These are not covered by Article 12 and may be taxed under the domestic law of the source country (Article 12 paragraph 6).
Example 1: Royalty Paid by a Singapore Company to a Netherlands Resident
A Singapore-based tech company pays S$100,000 to a Netherlands-resident software developer for the use of patented technology.
- DTAA application: The royalty is taxable only in the Netherlands, the recipient’s country of residence (Article 12 paragraph 1).
- Singapore withholding tax: No tax applies, provided the royalty qualifies under Article 12 and is not excluded under paragraph 6.
- Netherlands tax: The full S$100,000 is taxed under the Netherlands tax system.
Example 2: Royalty Paid by a Netherlands Company to a Singapore Resident
A Singapore company licenses its proprietary software to a Netherlands manufacturing firm, earning S$100,000 in royalty income.
- DTAA application: The income is taxable only in Singapore under Article 12 paragraph 1.
- Netherlands tax: The Netherlands may not impose withholding tax on the royalty, provided it qualifies under Article 12 and is not related to excluded categories.
- Singapore tax: The royalty is subject to income tax under the Singapore tax system, and the company reports it as part of its business income.
Example 3: Royalty from Film Rights Paid to a Netherlands Resident
A Netherlands media company receives S$100,000 from a Singapore broadcaster for licensing TV rights.
- DTAA application: Article 12 paragraph 6 explicitly excludes payments for the use of literary or artistic works, including motion picture films and tapes.
- Singapore withholding tax: The payment may be subject to withholding tax under Singapore domestic law.
- Netherlands tax: The company may claim a foreign tax credit for Singapore tax withheld.
Example 4: Royalty Effectively Connected to a Permanent Establishment
A Singapore company has a branch office (PE) in the Netherlands and receives S$100,000 in royalties from Dutch clients. The licensing contracts and IP assets are managed by the Dutch PE.
- DTAA application: Article 12 does not apply. Instead, Article 7 (Business Profits) governs the income.
- Netherlands tax: The full S$100,000 is taxable in the Netherlands.
- Singapore tax: Singapore taxes only the repatriated profit, if any, subject to the foreign tax credit mechanism under domestic law and the DTAA (Article 24).
Netherlands–Singapore DTAA: Tax on Personal Services
How Independent Services are taxed under the treaty
DTAA Rule
The taxation of independent personal services, such as professional or technical work performed by consultants, freelancers, or advisors, is governed by Article 15 of the Netherlands–Singapore DTAA. The general rule is that such income is taxable only in the recipient's country of residence, unless the services are performed in the other country.
If the services are performed in the other country, then that country may also tax the income if:
- The individual is present in the source country for more than 183 days in the relevant calendar year, or
- The payment is made by, or on behalf of, a resident of the source country, and the cost is borne by a permanent establishment in that country.
If these conditions are not met, the income remains taxable only in the country of residence.
Example 1: Services by a Singapore Resident to a Netherlands Company (No Presence in the Netherlands)
A Singapore-resident architect earns S$100,000 from designing a building for a Dutch client. The work is done entirely from Singapore, and the architect does not travel to the Netherlands.
- DTAA application: The income is taxable only in Singapore (Article 15 paragraph 1).
- Netherlands tax: None, as the services are not performed in the Netherlands.
- Singapore tax: The full S$100,000 is taxable under the Singapore tax system.
Example 2: Services by a Singapore Resident Performed in the Netherlands (More Than 183 Days)
A Singapore-based engineer is contracted by a Dutch firm to oversee a technical project in the Netherlands for 200 days in the calendar year and earns S$100,000.
- DTAA application: The Netherlands may tax the income, as the individual is present in the country for more than 183 days (Article 15 paragraph 2).
- Singapore tax: Singapore also taxes the global income of residents, but the individual may claim a foreign tax credit for tax paid in the Netherlands under Article 24.
Example 3: Services by a Netherlands Resident to a Singapore Company (Short Visit)
A Netherlands-based consultant travels to Singapore for a 10-day business trip and earns S$100,000 in consulting fees from a Singapore company. The payment is not borne by any permanent establishment.
- DTAA application: The income is taxable only in the Netherlands, as the visit is short and does not exceed the 183-day threshold (Article 15 paragraph 2).
- Singapore tax: No tax applies.
- Netherlands tax: The full income is taxed under Netherlands personal income tax law.
Example 4: Services by a Netherlands Resident to a Singapore Company (PE-Borne Costs)
A Dutch legal advisor provides legal opinions for a Singapore company. The services are performed remotely from the Netherlands, but the fee is paid by the Singapore company’s permanent establishment in the Netherlands.
- DTAA application: Since the cost is borne by a permanent establishment in the Netherlands, the Netherlands may tax the income.
- Singapore tax: If the individual is a tax resident in the Netherlands, Singapore does not tax the income.
- Relief: Not required, as Singapore does not impose tax in this case.
How Dependent Services are taxed under the treaty
DTAA Rule
The taxation of dependent services, such as employment income, is covered under Article 15 of the Netherlands–Singapore DTAA. The general principle is that salaries, wages, and other similar remuneration are taxable only in the employee's country of residence, unless the employment is exercised in the other country.
If the employment is exercised in the other country, then the host country may tax the income, unless all three of the following conditions are met:
- The employee is present in the other country for 183 days or fewer in the calendar year,
- The employer is not a resident of the host country, and
- The remuneration is not borne by a permanent establishment in the host country.
If all three conditions are satisfied, the income remains taxable only in the employee's country of residence.
Example 1: Singapore Resident Working Remotely for a Dutch Company
A Singapore-resident individual earns S$100,000 while working remotely from Singapore for a Netherlands-based employer. The individual never travels to the Netherlands.
- DTAA application: The income is taxable only in Singapore, as the employment is not exercised in the Netherlands.
- Singapore tax: The full S$100,000 is taxed under Singapore personal income tax law.
- Netherlands tax: No tax applies.
Example 2: Singapore Resident Temporarily Working in the Netherlands (Under 183 Days)
A Singapore-resident employee is sent to the Netherlands for a three-month assignment (90 days) and earns S$100,000. The employer is a Singapore company with no permanent establishment in the Netherlands.
- DTAA application: All three conditions are met, so the income is taxable only in Singapore (Article 15 paragraph 2).
- Netherlands tax: None.
- Singapore tax: The full amount is taxable under Singapore law.
Example 3: Singapore Resident Working in the Netherlands for More Than 183 Days
A Singapore-resident employee is seconded to the Netherlands for eight months (240 days) and earns S$100,000. The employer is still a Singapore company.
- DTAA application: The Netherlands may tax the income because the employee spends more than 183 days in the country.
- Taxation: The income is taxed in both Singapore and the Netherlands.
- Relief: The employee may claim a foreign tax credit in Singapore for the Netherlands tax paid, as allowed under Article 24.
Example 4: Netherlands Resident Working in Singapore for a Netherlands Company
A Netherlands-resident software engineer is sent to Singapore for five months and earns S$100,000. The employer is a Netherlands company with no permanent establishment in Singapore.
- DTAA application: The employee is present in Singapore for fewer than 183 days, and the employer is not a resident of Singapore. The salary is not paid by a Singapore PE.
- Singapore tax: No tax applies.
- Netherlands tax: The full amount is taxed in the Netherlands.
Example 5: Netherlands Resident Employed by a Dutch Company’s Singapore PE
A Netherlands-resident employee works in Singapore for seven months and is paid by the Singapore branch (PE) of a Netherlands company.
- DTAA application: The employment is exercised in Singapore and the cost is borne by a Singapore PE, so Singapore may tax the income.
- Taxation: The income is taxed in both countries.
- Relief: The employee may claim relief in the Netherlands for Singapore tax paid.
Netherlands–Singapore DTAA: Tax on Director Fee
How director fee is taxed under the treaty
DTAA Rule
According to Article 16 of the Netherlands–Singapore DTAA, director’s fees and similar payments are taxed in the country where the paying company is resident, regardless of where the director lives.
This rule applies to individuals serving as:
- A member of the board of directors of a Singapore company (if the director is a resident of the Netherlands), or
- A “bestuurder” or “commissaris” of a Netherlands company (if the director is a resident of Singapore).
The treaty does not limit the tax rate that can be applied by the source country, so local tax laws determine the amount of tax payable. The country of residence may also tax the income, but relief from double taxation is available under Article 24 of the treaty.
Example 1: Director’s Fee Paid by a Singapore Company to a Netherlands Resident
A Netherlands tax resident earns S$100,000 as a director of a Singapore company.
- DTAA application: The fee is taxable in Singapore, as the paying company is a Singapore resident (Article 16 paragraph 1).
- Singapore tax: The full S$100,000 is taxed under Singapore’s personal income tax rules. Withholding tax at 22 percent may apply if the director is treated as a non-resident.
- Netherlands tax: The income is also taxable in the Netherlands as the director’s country of residence. However, the individual may claim a foreign tax credit for the Singapore tax paid (Article 24).
Example 2: Director’s Fee Paid by a Netherlands Company to a Singapore Resident
A Singapore-resident professional receives S$100,000 in director’s fees for serving on the supervisory board of a Dutch company.
- DTAA application: The fee is taxable in the Netherlands, the country of residence of the paying company (Article 16 paragraph 2).
- Netherlands tax: The full amount may be taxed under Dutch personal income tax law.
- Singapore tax: The director is also liable to tax in Singapore on global income, but may be eligible for foreign tax credit for the Netherlands tax paid. If the income qualifies as foreign-sourced income not received in Singapore, it may be exempt under Singapore domestic rules.
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