background image

Abolishment of withholding tax on management fees — Orbitax Tax News & Alerts

It has been reported that withholding tax will no longer apply on management services rendered by non-residents entirely outside of Singapore on or after 29 December 2009, even if the service fees contain a mark-up element. Previously, the withholding tax did not apply only where the service fees represented a reimbursement of costs incurred by non-residents without any profit mark-up.

It should be noted that management services rendered before 29 December 2009 and paid at a later date continue to be subject to withholding tax where they contain a profit mark-up element.

This development follows the passing of the Income Tax (Amendment) Act which was gazetted on 29 December 2009.