Singapore

In Singapore, the tax residence of a corporation is determined by the place where the central management and control of its business is exercised. This is taken generally to mean the place where the directors meet to exercise de facto control. The Inland Revenue Authority of Singapore (IRAS) has also set out its practice on how it administers the residency rule, including for foreign-owned investment holding companies and where the board of directors meetings involve the use of virtual meeting technology.

Permanent establishment (PE)

The presence of a PE is largely irrelevant, except for treaty purposes, as Singapore taxes with reference to the source of income rather than the presence of a PE.

However, a PE is a clear indication of source.

The definition of a PE in Singapore’s double taxation agreements (DTAs) is largely based on the Organisation for Economic Cooperation and Development (OECD) Model Tax Convention definition.

It is generally taken to be a fixed place through which the business of an enterprise is wholly or partly carried on, and normally includes a place of management, a branch, an office, a factory, a workshop, and a place of extraction of natural resources, etc.

In addition, and subject to the terms of the relevant agreements, a non-resident may have a PE in Singapore if one:

• has a building site or a construction, assembly, or installation project that lasts longer than a specified period, or supervisory activities connected with the building site or construction project
• furnishes services (including consultancy services) through employees or other personnel in Singapore for more than a specified period, or
• has an agent in Singapore who has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of the enterprise.

The Singapore tax legislation defines a PE more broadly than most of the DTAs; however, as mentioned above, this is largely irrelevant where a treaty can take precedence.