Greece-Singapore DTAA: Tax Treaty Guide with Examples
A Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty between two countries aimed at eliminating the risk of double taxation on income or capital, providing relief to individuals and businesses that operate across borders. The Singapore-Greece DTAA serves this purpose by allocating taxing rights between the two countries, ensuring that residents of either Singapore or Greece are not taxed twice on the same income. This agreement provides clarity on various types of income such as dividends, interest, royalties, business profits, and employment income, offering tax relief mechanisms such as exemptions, reduced tax rates, and credits.
This article is intended for individuals and companies who are residents of either Singapore or Greece and engage in cross-border activities. It will explain the key provisions of the Singapore-Greece DTAA, provide examples of how income is taxed under the treaty, and guide you through the tax implications of different types of income and transactions.
To better understand how to operate a business in Singapore, refer to our Guide on Singapore Company Registration.
This article covers the following topics of the Singapore-Greece 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
Greece-Singapore DTAA: Purpose & Scope
What is Covered
The Singapore-Greece DTAA applies to taxes on income imposed by either country. This includes income such as business profits, dividends, interest, royalties, capital gains, directors' fees, independent professional services, and dependent personal services.
Who is Covered
The Singapore-Greece DTAA applies to residents of Singapore or Greece. This includes individuals, companies, and any other legal entities that are liable to tax in their country of residence.
Greece-Singapore DTAA: Key Terms Defined
Person
Tax Resident
A tax resident of a Contracting State refers to any person who is liable to tax in that state under the national regulations.
If an individual is considered a tax resident of both Singapore and Greece, the tie-breaker rule is applied to determine their residency for tax purposes. The tie-breaker rule is as follows:
- Permanent Home: The individual is deemed to be a resident only of the state where they have a permanent home available.
- Centre of Vital Interests: If they have a permanent home in both states, they are deemed to be a resident of the state with which their personal and economic relations are closer (centre of vital interests).
- Habitual Abode: If the centre of vital interests cannot be determined, or if there is no permanent home available in either state, the individual is deemed to be a resident only of the state in which they have an habitual abode
- Nationality: If the individual has an habitual abode in both states or in neither, they are deemed to be a resident of the state of which they are a national.
- Mutual Agreement: In any other case, the competent authorities of the contracting states will settle the residency issue by mutual agreement.
For a person other than an individual (e.g., a company), if they are a tax resident of both Contracting States, the entity will be considered a resident of the state in which its place of effective management is situated. If the place of effective management cannot be determined, the competent authorities of the two countries will resolve the issue by mutual agreement.
Permanent Establishment (PE)
Withholding Tax
We Have Helped Thousands Incorporate In Singapore
Greece–Singapore DTAA: Tax on Business Profits
How business profits are taxed under the treaty
The Singapore-Greece DTAA provides specific provisions for the taxation of business profits earned by a resident of one country from activities carried out in the other country. The taxation rights depend on whether the business is conducted through a Permanent Establishment in the other country.
Business Profits - No Permanent Establishment
If a Singapore company earns profits from Greece and does not have a permanent establishment in Greece, the profits are generally taxable only in Singapore. Greece does not have the right to tax the profits, except in limited circumstances as per the provisions of the DTAA.
Example 1:
- A Singapore company provides consultancy services to clients in Greece.
- The company does not have an office or a branch in Greece (i.e., no PE).
- Taxable in Singapore only, and no tax is payable in Greece.
Business Profits - With Permanent Establishment
If a Singapore company has a PE in Greece, such as a branch or an office, the profits attributable to that PE are taxable in Greece. The profits from the PE in Greece are also subject to tax in Singapore, but the Singapore company may claim a foreign tax credit for the tax paid in Greece to avoid double taxation.
Example 2:
- A Singapore company establishes a branch in Greece to conduct business operations.
- The profits generated by the branch are taxable in Greece and Singapore.
- The Singapore company can claim a foreign tax credit in Singapore for the taxes paid in Greece.
Business Profits - No Permanent Establishment in Singapore
Similarly, if a Greek company earns profits from Singapore and does not have a permanent establishment in Singapore, the profits are generally taxable only in Greece. Singapore does not have the right to tax the profits, except under specific circumstances as outlined in the DTAA.
Example 3:
- A Greek company provides services to customers in Singapore, but does not have a PE in Singapore.
- Taxable in Greece only, with no tax payable in Singapore.
Business Profits - With Permanent Establishment in Singapore
If a Greek company has a PE in Singapore, such as a branch or an office, the profits attributable to that PE are taxable in Singapore. The profits from the PE in Singapore are also subject to tax in Greece, but the Greek company can claim a foreign tax credit for the taxes paid in Singapore.
Example 4:
- A Greek company establishes a branch in Singapore to conduct business operations.
- The profits generated by the branch are taxable in Singapore and Greece.
- The Greek company can claim a foreign tax credit in Greece for the taxes paid in Singapore.
The Singapore-Greece DTAA provides specific provisions for the taxation of business profits earned by a resident of one country from activities carried out in the other country. The taxation rights depend on whether the business is conducted through a Permanent Establishment in the other country.
Business Profits - No Permanent Establishment
If a Singapore company earns profits from Greece and does not have a permanent establishment in Greece, the profits are generally taxable only in Singapore. Greece does not have the right to tax the profits, except in limited circumstances as per the provisions of the DTAA.
Example 1:
- A Singapore company provides consultancy services to clients in Greece.
- The company does not have an office or a branch in Greece (i.e., no PE).
- Taxable in Singapore only, and no tax is payable in Greece.
Business Profits - With Permanent Establishment
If a Singapore company has a PE in Greece, such as a branch or an office, the profits attributable to that PE are taxable in Greece. The profits from the PE in Greece are also subject to tax in Singapore, but the Singapore company may claim a foreign tax credit for the tax paid in Greece to avoid double taxation.
Example 2:
- A Singapore company establishes a branch in Greece to conduct business operations.
- The profits generated by the branch are taxable in Greece and Singapore.
- The Singapore company can claim a foreign tax credit in Singapore for the taxes paid in Greece.
Business Profits - No Permanent Establishment in Singapore
Similarly, if a Greek company earns profits from Singapore and does not have a permanent establishment in Singapore, the profits are generally taxable only in Greece. Singapore does not have the right to tax the profits, except under specific circumstances as outlined in the DTAA.
Example 3:
- A Greek company provides services to customers in Singapore, but does not have a PE in Singapore.
- Taxable in Greece only, with no tax payable in Singapore.
Business Profits - With Permanent Establishment in Singapore
If a Greek company has a PE in Singapore, such as a branch or an office, the profits attributable to that PE are taxable in Singapore. The profits from the PE in Singapore are also subject to tax in Greece, but the Greek company can claim a foreign tax credit for the taxes paid in Singapore.
Example 4:
- A Greek company establishes a branch in Singapore to conduct business operations.
- The profits generated by the branch are taxable in Singapore and Greece.
- The Greek company can claim a foreign tax credit in Greece for the taxes paid in Singapore.
Greece–Singapore DTAA: Tax on Dividends
How dividends are taxed under the treaty
The Singapore-Greece DTAA provides specific rules for the taxation of dividends paid between the two countries. While dividends are typically subject to tax in the source country, Singapore has a unique system where it does not impose withholding tax on dividends.
Dividends Paid by a Singapore Company to a Greek Resident
Since Singapore does not impose withholding tax on dividends, Greek residents receiving dividends from a Singapore company are not subject to Singaporean tax. However, Greece may tax the dividend income according to its domestic tax laws, subject to the provisions of the DTAA.
Dividends Paid by a Greek Company to a Singapore Resident
If a Greek company pays dividends to a Singapore resident, the dividends are subject to tax in Greece. Under the provisions of the DTAA, the tax on dividends in Greece is capped at 10%. However, if the Singapore resident owns at least 25% of the Greek company's capital, the withholding tax rate is reduced to 5%.
Example 1:
- A Greek company pays EUR 500,000 in dividends to a Singapore company that holds 15% of its capital.
- Withholding tax in Greece is 10% of EUR 500,000, amounting to EUR 50,000.
Exemption for Dividends Effectively Connected to a Permanent Establishment
If the dividends are effectively connected to a Permanent Establishment in the source country, the withholding tax rules may not apply. Instead, the business profits provisions of the DTAA will apply, and the dividends will be treated as part of the profits of the PE.
Greece–Singapore DTAA: Tax on Capital Gains
How capital gains are taxed under the treaty
Under the Singapore-Greece DTAA, the taxation of capital gains depends on the type of property being sold and the residency of the seller. In general, capital gains are taxed in the country of residence of the seller, unless specified otherwise by the provisions in the treaty.
Gains from the Sale of Immovable Property
If a resident of Singapore derives gains from the sale of immovable property located in Greece (as defined in Article 6 of the DTAA), those gains are taxable in Greece. Similarly, if a resident of Greece derives gains from the sale of immovable property located in Singapore, those gains are taxable in Singapore.
Example 1:
- A Singapore resident sells land located in Greece.
- Capital gains tax in Greece is applicable on the sale of the property, as the property is located in Greece.
Gains from the Sale of Movable Property (Business Property)
If the gains are derived from the sale of movable property that forms part of the business property of a Permanent Establishment, such as a branch or office, in the other country, those gains may be taxed in the country where the PE is situated.
Example 2:
- A Singapore company sells business equipment located in its Greece-based PE.
- Capital gains tax in Greece is applicable as the sale is linked to the Greek PE.
Gains from the Sale of Ships or Aircraft
Gains from the sale of ships or aircraft used in international traffic or movable property related to the operation of such ships or aircraft are taxable only in the country where the profits from such transport activities are taxed under the provisions of Article 8 (Shipping and Air Transport).
Example 3:
- A Singapore company sells a cargo ship used in international trade.
- Capital gains tax is only applicable in Singapore, as the ship is operated in international traffic.
Gains from the Sale of Shares or Comparable Interests
Gains derived from the sale of shares or comparable interests in a company or entity are taxable in the country where the property is located, if more than 50% of the value of the shares is derived directly or indirectly from immovable property located in the other country.
Example 4:
- A Singapore resident sells shares in a Greek company whose value is derived primarily from Greek real estate.
- Capital gains tax in Greece may apply because more than 50% of the value of the shares is tied to immovable property in Greece.
Default Rule for Other Property
Any other gains not mentioned in the above provisions, such as those from the sale of movable property or intangible assets, will be taxable only in the country of residence of the seller, as per the default rule in the DTAA.
Example 5:
- A Greek resident sells stocks in a company located in Singapore, and the shares do not meet the criteria for the exceptions mentioned.
- Capital gains tax in Greece is applicable, as the default rule dictates that capital gains are taxed in the country of residence of the seller.
Greece–Singapore DTAA: Tax on Interest Income
How interest income is taxed under the treaty
The Singapore-Greece DTAA governs the taxation of interest income derived by a resident of one country from sources in the other country. In general, interest income is taxable in the country of the recipient’s residence, but the country where the interest is paid may also tax it. The DTAA limits the tax that can be charged by the source country.
Interest Paid by a Singapore Company to a Greek Resident
If a Singapore company pays interest to a Greek resident, the interest is subject to Singapore withholding tax. However, under the provisions of the DTAA, the tax rate on interest paid to a Greek resident is capped at 7.5% of the gross amount of interest.
Example 1:
- A Singapore company pays S$100,000 in interest to a Greek resident.
- Withholding tax in Singapore is 7.5%, which amounts to S$7,500.
Interest Paid by a Greek Company to a Singapore Resident
If a Greek company pays interest to a Singapore resident, the interest is subject to tax in Greece. However, under the DTAA, the withholding tax rate on interest paid to a Singapore resident is also capped at 7.5% of the gross amount of interest.
Example 2:
- A Greek company pays EUR 100,000 in interest to a Singapore company.
- Withholding tax in Greece is 7.5%, amounting to EUR 7,500.
Exemption for Certain Interest Payments
The DTAA provides an exemption for certain interest payments. Specifically, interest paid to the government or government-related entities, such as the Monetary Authority of Singapore or the Hellenic Republic, is exempt from withholding tax in the source country.
Besides, interest income earned by a bank is generally exempt from withholding tax in the source country, provided the beneficial owner of the interest is a bank in the other country.
Greece–Singapore DTAA: Tax on Royalties
How royalty income is taxed under the treaty
The Singapore-Greece DTAA governs the taxation of royalties earned by residents of one country from the other. Royalties may be subject to tax in both the source country (where the royalties arise) and the country of residence of the recipient. However, the DTAA limits the tax that can be applied in the source country.
Royalties Paid by a Singapore Company to a Greek Resident
Royalties arising in Singapore and paid to a Greek resident may be taxed in Greece. Additionally, the royalties may also be taxed in Singapore, but the Singapore withholding tax is capped at 7.5% of the gross amount of royalties.
Example 1:
- A Singapore company pays S$100,000 in royalties to a Greek resident.
- Withholding tax in Singapore is 7.5%, which amounts to S$7,500.
- The royalties are also subject to tax in Greece.
Royalties Paid by a Greek Company to a Singapore Resident
Royalties arising in Greece and paid to a Singapore resident may be taxed in Singapore. Similarly, they may also be taxed in Greece, but the withholding tax rate is capped at 7.5% of the gross amount of royalties under the DTAA.
Example 2:
- A Greek company pays EUR 100,000 in royalties to a Singapore company.
- Withholding tax in Greece is 7.5%, which amounts to EUR 7,500.
- The royalties are also subject to tax in Singapore.
Exemption for Certain Royalty Payments
As with other income types, certain royalty payments, such as those made to government entities or government-related bodies in either country, may be exempt from withholding tax in the source country.
Greece–Singapore DTAA: Tax on Personal Services
How Independent Services are taxed under the treaty
How Dependent Services are taxed under the treaty
Article 14 of the Singapore-Greece DTAA outlines the rules for the taxation of dependent services (such as salaries, wages, and similar remuneration) derived by a resident of one country from employment exercised in the other country. The taxation rights are determined based on where the employment is exercised, the duration of stay, and the source of the remuneration.
Income from Employment - General Rule
Under Article 14(1), salaries, wages, and other similar remuneration derived by a resident of a Contracting State in respect of an employment are generally taxable only in the State of residence unless the employment is exercised in the other Contracting State. If the employment is exercised in the other country, the remuneration is subject to tax in the country where the employment is exercised.
Example 1:
- A Greek resident works in Singapore and earns S$100,000 in salary.
- Taxable in Singapore as the employment is exercised in Singapore.
Income from Employment - Exemption for Short-Term Employment
According to Article 14(2), remuneration derived by a resident of a Contracting State for employment exercised in the other Contracting State is taxable only in the country of residence if:
- The recipient is present in the other country for a period or periods not exceeding 183 days in any 12-month period; and
- The remuneration is paid by an employer who is not a resident of the other country; and
- The remuneration is not borne by a Permanent Establishment of the employer in the other country.
Example 2:
- A Singapore resident works in Greece for 4 months (less than 183 days), and the salary is paid by an employer based in Singapore.
- Exempt from tax in Greece under the conditions provided in Article 14(2), and taxable only in Singapore.
Greece–Singapore DTAA: Tax on Director Fee
How director fee is taxed under the treaty
Under the Singapore-Greece DTAA, director's fees are payments made to individuals for their services as members of a company's board of directors. These fees are subject to tax in the country where the company is resident (the source country), and may also be taxed in the director's country of residence.
Director's Fees Paid by a Singapore Company to a Greek Resident
If a Singapore company pays director’s fees to a Greek resident, those fees may be taxed in Greece, the country where the director resides. Additionally, they may also be taxed in Singapore, the country where the company is based, as per the DTAA.
Example 1:
- A Singapore company pays S$100,000 in director’s fees to a Greek resident.
- Tax in Singapore: The fees are taxed in Singapore.
- Tax in Greece: The Greek resident is also liable to pay tax on the fees in Greece.
- In this case, the Greek resident may be able to claim a tax credit in Greece for the taxes paid in Singapore, to avoid double taxation on the same income.
Director's Fees Paid by a Greek Company to a Singapore Resident
Similarly, if a Greek company pays director’s fees to a Singapore resident, the fees may be taxed in Singapore, the country of residence of the director, and also in Greece, where the company is resident.
Example 2:
- A Greek company pays EUR 100,000 in director’s fees to a Singapore resident.
- Tax in Greece: The fees may be taxed in Greece.
- Tax in Singapore: The Singapore resident is also liable to pay tax on the fees in Singapore.
- In this case, the Singapore resident may be able to claim a tax credit in Singapore for the taxes paid in Greece, ensuring that they are not taxed twice on the same income.
Start a Singapore Company
High-quality service — no shortcuts, no surprises
Frequently Asked Questions about Singapore-Greece DTAA
Related Articles
Is Singapore the Right Place to Incorporate?
How to Register a New Company in Singapore
Singapore's Tax System and Types of Taxes