Executive summary

The renewed version of the income tax treaty between Taiwan and Singapore entered into force on 13 February 2026 and will become effective on 1 January 2027.

Under the treaty, Singapore resident investors that are considered the beneficial owners of Taiwan-sourced dividend or interest income will be eligible for a 10% treaty withholding tax rate.

Additionally, for treaty benefit purposes, a Singapore collective investment vehicle (CIV) defined in this renewed treaty shall be treated as a resident and the beneficial owner of the Taiwan-sourced income it receives.

Singapore resident investors registered as foreign institutional investors (FINIs) trading in the Taiwan listed-securities market should consider reviewing their residency and beneficial owner status. Those with beneficial ownership status can receive treaty benefits of a 10% reduced withholding tax rate on Taiwan-sourced dividends and interest received in the period beginning 1 January 2027 by pursuing a relief-at-source advanced approval or tax reclaims from the Taiwan tax authorities.

Detailed discussion

The 13 February 2026 renewed income tax treaty between Taiwan and Singapore, which updates a treaty originally dated 1 January 1982, will become effective on 1 January 2027. More specifically, with respect to taxes withheld at source, the renewed treaty will apply to income payable on or after 1 January 2027; with respect to other taxes, it will apply to income in the taxable periods beginning on or after 1 January 2027.

Singapore resident investors that are the beneficial owners of Taiwan-sourced dividend or interest income will be eligible for a 10% treaty withholding tax rate under the renewed treaty. Under the original treaty, no preferential withholding tax rate was offered for interest income, and the amount of dividend withholding tax, together with underlying tax on income from which the dividends are declared, was capped at 40%. Prior to this treaty renewal, Singapore investors could not reduce the standard Taiwan withholding tax (21% on dividends and 15% or 20% on interest) because the domestic rate for dividends was already lower than the 40% ceiling on the combined dividend tax and underlying corporate income tax on the profits out of which the dividends are declared, and no preferential rate for interest was available under the original treaty.

Notwithstanding the other provisions of the renewed treaty, a Singapore CIV is treated as a resident and the beneficial owner of the Taiwan-sourced income for treaty benefit purposes if it meets either of the two following descriptions (provided that a Singapore resident that had received the income in the same circumstances would have been considered to be the beneficial owner).

First, the CIV is treated as a resident and the beneficial owner if it is a collective investment scheme under the Securities and Futures Act of Singapore (SFA) and is not exempted from Subdivisions (2) and (3) of Division 2, Part XIII of the SFA by virtue of any of the provisions in Subdivision (4) of Division 2, Part XIII of the SFA of that territory and (1) the arrangement is not constituted in trust form but is controlled and managed in Singapore or (2) the arrangement is constituted as a trust and the trustee is a Singapore tax resident.

Second, the CIV is treated as a resident and the beneficial owner if it is any other investment fund, arrangement or entity established in Singapore that the Singapore and Taiwan competent authorities both agree to treat as a CIV.

Implications

Singapore resident investors registered as FINIs in Taiwan should consider reviewing their residency and beneficial owner status to determine whether the preferential withholding tax rates apply to them.

They can benefit from the renewed treaty for a 10% reduced withholding tax rate on the Taiwan-sourced dividend and interest received in the period from 1 January 2027 onward through pursuing a relief-at-source advanced approval or tax reclaims from the Taiwan tax authorities.