Australia-Singapore DTAA:
Tax Treaty Guide with Examples

The Double Taxation Avoidance Agreement (DTAA) between Australia and Singapore aims to eliminate the risk of the same income being taxed in both countries, thereby promoting cross-border trade, investment, and economic cooperation. Originally signed on 11 February 1969, and modified through subsequent protocols and the Multilateral Instrument (MLI), the treaty reflects a modern approach to preventing tax evasion and ensuring fair taxation.

This DTAA is particularly relevant for residents and businesses of either country who derive income across borders, as it provides clear rules on how income types such as business profits, dividends, interest, royalties, employment income, and pensions are to be taxed.

Whether you’re an entrepreneur, investor, or professional working between Singapore and Australia, this guide will help you navigate how your cross-border income is taxed under the DTAA. Considering setting up a company in Singapore as an Australian entrepreneur? In addition to the tax advantages outlined in this article, our Singapore company registration guide explains the full incorporation process.

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This article covers the following topics of the Singapore-Australia DTAA:

guide on singapore-australia dtta
australia singapore double tax treaty

Australia-Singapore DTAA: Purpose & Scope

The Australia–Singapore DTAA applies to residents of one or both countries, meaning individuals or legal entities who are considered tax residents under the domestic laws of either Australia or Singapore.

The treaty applies to income taxes, including Business Profits, Dividends, Interest, Royalties, Pensions, Capital Gains, Director’s Fees, Employment Income, and Independent Personal Services.

By structuring their business through Singapore and utilizing the Australia–Singapore DTAA, Australian entrepreneurs can achieve greater tax efficiency. Singapore offers a capped corporate tax rate of 17%, along with substantial exemptions for eligible startups and SMEs. In addition, its progressive personal income tax system remains relatively low compared to global standards—providing added appeal for founders, employees, and investors.

Australia-Singapore DTAA: Key Terms Defined

To understand how the Singapore–Australia DTAA works, it’s important to first understand the key terms used throughout the agreement. These definitions form the foundation for how treaty benefits apply.

Person

Under the DTAA, a person is defined as:

  • Individuals
  • Companies
  • Any body of persons, whether incorporated or not

Tax Resident

A person is a tax resident of Singapore or Australia if they are liable to tax in that country based on residence, domicile, place of management, or similar criteria, as defined under each country's domestic tax laws.

Dual Residency

For individuals who qualify as residents of both countries, the treaty provides a “tie-breaker test” based on:

  • Permanent home
  • Habitual abode
  • Centre of vital interests
  • Nationality

For companies and other non-individual entities:

  • If a company qualifies as a resident of both countries, the tie-breaker is based on place of effective management.

Permanent Establishment (PE)

A PE under the Singapore-Australia DTAA is a fixed place of business through which an enterprise carries on its activities wholly or partly. This includes:

  • Offices, branches, factories, workshops
  • Construction sites lasting more than 6 months
  • Agents with authority to conclude contracts
  • Use of substantial equipment or supervisory activities exceeding 6 months

Certain preparatory or auxiliary activities (like warehousing or information gathering) do not create a PE.

Withholding Tax

This is the tax withheld at source when cross-border payments are made. For example:

  • When a Singapore company pays dividends to an Australian resident, Singapore may apply a withholding tax (if applicable under local law and subject to treaty limits).
  • The DTAA sets maximum withholding tax rates on interest, royalties, and dividends to avoid excessive taxation at source.

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Australia-Singapore DTAA: Tax on Business Profits

How business profits are taxed under the treaty

Article 5 of the treaty states that business profits of an enterprise are taxable only in the country of residence, unless the business is conducted in the other country through a permanent establishment (PE).

  • If no PE exists in the other country → profits are taxed only in the country of residence.
  • If a PE does exist → the other country can tax only the profits attributable to that PE.

This rule ensures that a company doesn’t get taxed in both countries for the same business income, unless it has a meaningful presence (a PE) in the other country.

Examples (assume a business profit of 500,000 SGD)

Case 1: Singapore Company earning from Australia – No PE in Australia

  • Taxing Rights: Only Singapore can tax.
  • Estimated tax payable in Australia: SGD 0. As there is no PE in Australia, the profits are not taxable in Australia.
  • Estimated tax payable in Singapore: ~17% corporate tax → SGD 85,000

Case 2: Singapore Company earning from Australia – With PE in Australia

  • Taxing Rights: Both countries may tax.
  • Estimated tax payable in Australia: 30% corporate tax (on PE-attributable income) → SGD 150,000
  • Estimated tax payable in Singapore: 17% corporate tax → SGD 85,000, but foreign tax credit applies. Net Effective Tax in Singapore: Likely zero (full credit for Australian tax paid)

PE exists, so Australia may tax PE-attributable profits. Singapore taxes global income but grants credit for tax already paid in Australia.

Case 3: Australian Company earning from Singapore – No PE in Singapore

  • Taxing Rights: Only Australia can tax.
  • Estimated tax payable in Singapore: SGD 0
  • Estimated tax payable in Australia: 30% corporate tax → SGD 150,000

Since there is no PE in Singapore, the profits are not taxable in Singapore.

Case 4: Australian Company earning from Singapore – With PE in Singapore

  • Taxing Rights: Both countries may tax.
  • Estimated tax payable in Singapore: 17% corporate tax → SGD 85,000
  • Estimated tax payable in Australia: 30% tax → SGD 150,000, less foreign tax credit for Singapore tax paid
  • Singapore has primary taxing rights over the PE profits. Australia taxes worldwide income but allows a credit for Singapore tax paid.
  • Note that if the Singapore presence is a locally incorporated subsidiary, not a branch (PE), the income is taxed fully in Singapore and not in Australia.

Australia-Singapore DTAA: Tax on Dividends

How dividends are taxed under the treaty

Under the Singapore–Australia DTAA:

  • Dividends paid by an Australian company to a Singapore resident person may be taxed in Australia, but the withholding tax is capped at 15% of the gross dividend.
  • Dividends paid by a Singapore company to an Australian resident person are exempt from Singapore tax, as Singapore does not levy withholding tax on dividends.
  • However, if the dividend is attributable to a PE, the PE rules apply and the dividend may be taxed as part of business profits in the source country.

Example 1: Dividends Paid by a Singapore Company to an Australian Resident Person
Assumed dividend amount: SGD 500,000

In Singapore:

  • No withholding tax applies to dividends paid by a Singapore-resident company.
  • The full amount (SGD 500,000) is remitted to the Australian resident.
  • This applies equally to both individuals and companies.

In Australia:

  • Dividends received by an individual:
    • The dividend is fully taxable as foreign income.
    • Tax rates depend on the recipient’s income bracket—potentially up to 45%.
    • No franking credit is available because the dividend is foreign-sourced.
  • Dividends received by a company:
    • Taxed at the corporate income tax rate of 30%.
    • Again, no franking credit applies.
  • No foreign tax credit is available because no foreign tax was paid.

Example 2: Dividends Paid by an Australian Company to a Singapore Resident Person
Assumed dividend amount: SGD 500,000

In Australia (withholding tax):

  • A 15% withholding tax applies under the Singapore–Australia DTAA.
  • SGD 75,000 is withheld at source.
  • This applies to both individuals and companies that are Singapore tax residents.
  • The remaining SGD 425,000 is paid out.

In Singapore:

  • For Individuals (Singapore Tax Residents):
    • The dividend is foreign-sourced income. Singapore generally does not tax foreign income received by individuals, even if remitted.
    • Therefore:
      • No Singapore tax is payable on the dividend.
      • No foreign tax credit is needed or available.
      • The dividend is taxed only once — in Australia, at 15%.
  • For Companies (Singapore Tax Residents):
    • The dividend is in principle taxable when received in Singapore. However, it may qualify for tax exemption under Section 13(8) of the Income Tax Act if all three conditions are met:
      • Taxed in Australia: Yes — 15% withholding tax applies
      • Australia's headline corporate tax rate ≥15%: Yes
      • The Singapore tax authority is satisfied that the exemption is beneficial to the Singapore company.
    • If the exemption applies:
      • No Singapore tax is payable on the dividend.
      • The income is fully exempt from Singapore tax.
    • If the exemption does not apply:
      • The company is taxed at 17% in Singapore.
      • A foreign tax credit is available for the SGD 75,000 already paid in Australia.
      • If Singapore tax exceeds the credit (e.g. SGD 85,000 due, credit of SGD 75,000), the company pays the net difference (SGD 10,000).

Australia-Singapore DTAA: Tax on Capital Gains

How capital gains are taxed under the treaty

Article 10A of the Singapore–Australia DTAA outlines how capital gains are taxed:

  • Real property and property-rich shares: The country where the property is located may tax the gains.
  • Gains connected to a permanent establishment (PE): Taxable in the country where the PE is located.
  • Gains from ships and aircraft: Taxable only in the country of residence of the operator.
  • All other capital gains: The DTAA does not exempt or allocate taxing rights, so each country applies its domestic law

Example 1: Sale of Australian Shares by a Singapore Resident

Scenario: A Singapore tax resident individual or company sells shares in an Australian company and earns a SGD 500,000 capital gain.

  • The seller is a non-resident of Australia for tax purposes.
  • The company being sold is not property-rich (i.e. less than 50% of assets from Australian real estate).
  • No PE or business connection in Australia.

In Australia:

  • No Australian capital gains tax applies. Under Australian domestic law, this is not Taxable Australian Property (TAP).

In Singapore:

  • No tax in Singapore. Singapore does not tax capital gains.

Net result:

  • The entire SGD 500,000 gain is tax-free.

Example 2: Sale of Singapore Shares by an Australian Resident

Scenario: An Australian tax resident individual or company sells listed shares in a Singapore company and earns a SGD 500,000 capital gain.

In Singapore:

  • No tax in Singapore. Singapore does not impose capital gains tax on such transactions. The DTAA does not override this.

In Australia:

  • Australia taxes residents on worldwide capital gains. This gain is fully taxable in Australia.
  • Tax payable:
    • Individual: May receive a 50% CGT discount if shares were held for more than 12 months. Estimated tax (45% marginal rate, with discount): ~SGD 112,500
    • Company: No CGT discount. Taxed at corporate rate of 30% → SGD 150,000
  • Net result:
    • Taxed entirely in Australia.

Example 3: Sale of a Singapore Real Estate Property by an Australian Resident

Scenario: An Australian tax resident (individual or company) sells a residential property located in Singapore, earning a SGD 500,000 capital gain.

In Singapore:

  • Under Article 10A(1), the country where the property is located has taxing rights.
  • Singapore does not impose capital gains tax on real estate sales, unless it is trading income (e.g. property flipping).
  • For normal long-term holdings, no tax applies.

In Australia:

  • Australia taxes its residents on worldwide capital gains.
  • The Singapore-sourced gain is taxable in Australia.
  • Individual (50% CGT discount): ~SGD 112,500
  • Company: SGD 150,000

Net result:

  • Not taxed in Singapore
  • Fully taxed in Australia

Example 4: Sale of an Australian Real Estate Property by a Singapore Resident

Scenario: A Singapore-resident (individual or company) sells real property located in Australia, earning a SGD 500,000 capital gain.

In Australia:

  • Under Article 10A(1), Australia has taxing rights over real estate located in its territory.
  • Real property is classified as Taxable Australian Property (TAP).
  • Result: Fully taxable in Australia.
  • Company: 30% tax → SGD 150,000
  • Individual: Up to 45% (with 50% CGT discount if held >12 months) → ~SGD 112,500

In Singapore:

  • Capital gains are not taxed, unless treated as income from trade (rare).
  • Result: No Singapore tax

Net result:

  • Fully taxed in Australia
  • Not taxed in Singapore

PE-Related Case

If the gain arises from assets attributable to a PE or fixed base in the source country (e.g. a Singapore company operating a branch in Australia):

  • The country of the PE (e.g. Australia) may fully tax the gain under DTAA Article 10A(2).
  • This includes business assets (e.g. goodwill, licenses, equipment).

Australia-Singapore DTAA: Tax on Interest Income

How interest income is taxed under the treaty

Article 11 of the Singapore–Australia DTAA governs the taxation of interest income:

  • Interest may be taxed in both the source country and the residence country.
  • However, the source country’s tax is capped at 10% of the gross interest (Article 11(2))
  • The residence country must provide double taxation relief — typically through a foreign tax credit.
  • Public sector lenders and certain bond-related interest may qualify for exemptions.

Example 1: Interest Paid by a Singapore Company to an Australian Resident

Scenario: A Singapore-resident company pays SGD 100,000 in interest to an Australian-resident lender (individual or company).

In Singapore:

  • DTAA cap: 10%
  • SGD 10,000 withheld and paid to IRAS.

In Australia:

  • Interest income is taxable for residents.
  • The Australian lender declares the full SGD 100,000 as income.
  • A foreign tax credit of SGD 10,000 is granted against Australian tax payable.
  • Individual: Taxed at marginal income tax rates in Australia.
  • Company: Taxed at 30%, with credit for SGD 10,000 already paid.

Result:

  • Taxed in both countries — but no double taxation due to foreign tax credit in Australia.

Example 2: Interest Paid by an Australian Company to a Singapore Resident

Scenario: An Australian-resident company pays SGD 100,000 in interest to a Singapore-resident lender (individual or company).

In Australia:

  • DTAA cap: 10%
  • SGD 10,000 withheld and paid to ATO.

In Singapore:

  • Individuals: Foreign interest income is generally not taxed.
  • Companies: Foreign interest is taxable in Singapore, unless the Section 13(8) exemption applies.
  • Exemption under Section 13(8) applies if:
    • Interest was taxed abroad
    • Australia’s corporate tax rate is ≥15%
    • IRAS deems that the income is beneficial to Singapore (usually the case)
  • If exempt: No tax in Singapore.
  • If not exempt: 17% tax, minus foreign tax credit for the SGD 10,000 already withheld.

Result:

  • Individuals: Taxed only in Australia
  • Companies: Taxed only in Australia if exemption applies; otherwise, taxed in both countries with credit in Singapore

Australia-Singapore DTAA: Tax on Royalties

How royalty income is taxed under the treaty

Article 12 of the Singapore–Australia DTAA governs royalty payments:

  • Royalties may be taxed in both the source country and the residence country.
  • The source country’s tax is capped at 10% of the gross amount.
  • The residence country must provide double taxation relief, typically through foreign tax credit.

Definition of Royalties (Article 12(3)) includes:

  • Payments for use of or right to use:
  • Copyrights
  • Patents, designs, or models
  • Plans, secret formulas or processes
  • Trademarks
  • Industrial, commercial, or scientific equipment
  • Know-how
  • Payments for use of motion picture films or TV/radio content

Note: The MLI adopted by both countries does not override Article 12, so the 10% limit remains in force.

Example 1: Royalties Paid by a Singapore Company to an Australian Resident

Scenario: A Singapore company pays SGD 100,000 in royalties to an Australian-resident company for use of patented technology.

In Singapore:

  • DTAA rule: 10% cap
  • SGD 10,000 is withheld and paid to IRAS.

In Australia:

  • Royalties received by a resident are taxable as income.
  • A foreign tax credit of SGD 10,000 is granted.

Result:

  • Taxed in Singapore (10% withheld)
  • Taxed in Australia (with credit for the Singapore tax)

Example 2: Royalties Paid by an Australian Company to a Singapore Resident

Scenario: An Australian-resident company pays SGD 100,000 in royalties to a Singapore-resident company for the use of proprietary software.

In Australia:

  • DTAA rule: Reduces withholding to 10%
  • SGD 10,000 is withheld and paid to the ATO

In Singapore:

  • For individuals: Foreign royalty income is usually not taxed, unless received in the course of business.
  • For companies: Foreign-sourced royalties are taxable unless the Section 13(8) exemption applies:
    • Royalty taxed in Australia
    • Australia's tax rate ≥15%
    • Income is beneficial to Singapore
  • If exemption applies (usually the case): No tax in Singapore
  • If not: Taxed at 17%, with foreign tax credit for the SGD 10,000 already paid.

Result:

  • Individuals: Generally taxed only in Australia
  • Companies:
    • If exempt → taxed only in Australia
    • If not exempt → taxed in both countries, with foreign tax credit in Singapore

Australia-Singapore DTAA: Tax on Personal Services

How independent services are taxed under the treaty

Independent Personal Services are covered under Article 14 of the Singapore–Australia DTAA. This applies to self-employed professionals such as consultants, doctors, architects, and freelancers.

  • Income is taxable only in the country of residence, unless:
    • The individual has a fixed base regularly available in the other country, or
    • The individual is present in the other country for 183 days or more in any 12-month period.
  • If either condition is met, the other country may tax income attributable to the fixed base or time spent.

Example 1: Freelance Architect (Singapore Resident) Working for Australian Clients

Scenario: A Singapore-resident architect works for Australian clients while physically present in Australia for 120 days, earning SGD 100,000.

In Australia:

  • No fixed base in Australia
  • Stay is <183 days
  • No Australian tax under Article 14

In Singapore:

  • Income is taxable in Singapore

Result:

  • Taxed only in Singapore

Example 2: Australian Resident Freelancer Working Remotely for a Singapore Company

Scenario: An Australian-resident consultant performs services remotely from Australia for a Singaporean client, earning SGD 100,000.

In Singapore:

  • No fixed base or presence in Singapore
  • No Singapore tax

In Australia:

  • Income is taxable as worldwide income
  • Fully taxed in Australia

Result:

  • Taxed only in Australia

How employment income is taxed under the treaty

Employment related income is covered under Article 15 of the double tax treaty. This applies to employment income (salaries, wages).

  • Employment income is taxable in the country of residence, unless employment is physically exercised in the other country.
  • The other country may not tax if all three of these conditions are met:
    • The employee is present in the other country less than 183 days in a 12-month period, and
    • The employer is not a resident of the other country, and
    • The salary is not paid by or borne by a PE in the other country.

Example 1: Singaporean Employee Sent to Australia for 6-Month Assignment

Scenario: A Singapore tax resident works in Australia for 180 days on secondment from a Singapore-based employer and earns SGD 100,000.

In Australia:

  • Present <183 days
  • Employer not resident in Australia
  • No PE or cost borne in Australia
  • No Australian tax

In Singapore:

  • Full income taxable as global income
  • Taxed in Singapore

Result: Taxed only in Singapore

Example 2: Australian Resident Working in Australia for a Singapore Company

Scenario: An Australian-resident employee works remotely in Australia for a Singapore-based company, earning SGD 100,000.

In Australia:

  • Employment is exercised in Australia
  • Australian resident
  • Fully taxed in Australia

In Singapore:

  • No PE or source connection
  • No Singapore tax

Result: Taxed only in Australia

Australia-Singapore DTAA: Tax on Director Fee

How director fee is taxed under the treaty

Director Fee is covered under Article 16 of the Singapore-Australia DTAA.

  • Director’s fees received by a resident of one country for serving as a director of a company in the other country may be taxed in the country where the company is resident.
  • This rule overrides the general rule for personal services (Articles 14 and 15).
  • Taxation applies regardless of where the services are performed.
  • Key point: The “paying company’s country” has taxing rights, not necessarily the country where the director resides or performs their duties.

Example 1: Director’s Fees Paid by an Australian Company to a Singapore Resident

Scenario: A Singapore tax resident (individual) receives SGD 100,000 as director’s fees from an Australian company, for serving on its board.

In Australia:

  • Under DTAA Article 16, Australia has the primary taxing right.
  • Director’s fees are taxed at non-resident individual rates:
    • Up to 45%
    • Estimated tax: ~SGD 32,000–45,000
  • The individual must file an Australian tax return and pay tax directly.

In Singapore:

  • Director’s fees are foreign-sourced.
  • Singapore grants foreign tax credit for foreign tax paid.
  • Since Australian tax (up to 45%) exceeds Singapore tax (approx. SGD 11,500–15,000):
    • The foreign tax credit fully offsets any Singapore liability.
    • No further tax payable in Singapore

Final Result:

  • Taxed in Australia
  • Not taxed in Singapore, due to full foreign tax credit

Example 2: Director’s Fees Paid by a Singapore Company to an Australian Resident

Scenario: An Australian tax resident individual receives SGD 100,000 in director’s fees from a Singapore-resident company, for serving as a non-resident director.

In Singapore:

  • As per the DTAA, Singapore has taxing rights as the country of residence of the paying company
  • DTAA does not reduce the domestic rate — Article 16 provides for source country taxation, but does not cap the rate.
  • Director’s fees paid to a non-resident individual are subject to a final withholding tax of 22% (not 15% — 15% applies to general service income, not director's fees).
  • SGD 22,000 is withheld by the company and remitted to IRAS.
  • This is a final tax — no filing requirement in Singapore.

In Australia:

  • Australia taxes residents on worldwide income.
  • The Australian resident must:
    • Report the SGD 100,000 as foreign income.
    • Convert to AUD at applicable rate (e.g., ~AUD 100,000 for simplicity).
    • Pay personal income tax based on their marginal tax rate (potentially up to 45%).
  • A foreign income tax offset (FITO) is available for the SGD 22,000 Singapore tax paid.
    • If the Australian tax on this income is more than SGD 22,000, the person pays the difference.
    • If it’s less, the excess credit is not refundable.
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Frequently Asked Questions about Singapore-Australia DTAA

This article is provided for general informational purposes only and does not constitute tax advice. You should consult with a qualified professional for advice tailored to your specific situation.
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Author

Eddy Putra

Eddy has been in the corporate services industry for over 20 years. An experienced Chartered Accountant and alumnus of Deloitte Singapore, he has extensive expertise in corporate finance, tax, structuring, and regulatory compliance. Eddy specializes in advising global clients on business expansion and corporate migration to Singapore.

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