Treaties reduce withholding tax (WHT) on cross-border payments—if you actually qualify.
Why treaties matter. A 10% dividend WHT on a $5 m distribution is $500k. With the right treaty and holding structure, that bill may halve—or disappear.
Eligibility is not a form. Treaties require residency and often beneficial ownership and limitation-on-benefits (LOB). Shell companies with no mind and management fail.
Designing the route. Map your payor country, payee country, and available treaties. Compare dividend/interest/royalty rates and anti-abuse clauses.
Substance that convinces. Directors, local office, employees, and decision records. A modest but real footprint beats a brass plate every time.
Administration. Apply for certificates of residence, keep inter-company agreements current, align transfer-pricing, and reconcile bank trails.
FAQ:
- Is Singapore always best? It’s strong, but the “best” depends on flows, industry, and LOB tests.
- Can I backdate treaty claims? Rarely; plan before the money moves. Editor’s Note: A small design step before a large dividend often saves seven figures. Tags: DTA, Withholding Tax, Structuring, Substance