ASEAN Regulatory Brief: Singapore-India Tax Treaty, Foreign Ownership of Property in Indonesia, and Malaysia Halal Food Certification

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Singapore: Authorities Seek More Time to Revise Tax-Treaty with India

The Singaporean authorities are asking for more time to revise its 1994 tax treaty with India, citing the need for additional time for its investors to shift to source-based taxation. However, Indian authorities have rejected any further delay in the revision of the treaty, which would help prevent Singapore – the top source of FDI into India – from being used as a shelter to avoid taxes. The development comes in the wake of the recent revision of the India-Mauritius tax treaty, which closed a popular loophole used by investors to avoid taxes on capital gains made in India.

Singapore’s revenue officials have asked for additional time beyond March 31. India, on the other hand, wants to revise the treaty before April 2017 – when its revised tax treaty with Mauritius comes into effect. Singapore is the largest FDI source for India at US$13.69 billion.

Professional Service_CB icons_2015 RELATED: International Tax Planning Services from Dezan Shira & Associates

Indonesia: Minimum Prices for Ownership of Property by Foreigners Revised

The Indonesian government on October 14 revised the minimum property prices for foreigners wanting to buy property in the country. The change was notified in the Agrarian and Spatial Planning Affairs/National Land Agency (BPN) Regulation No. 29/2016 on Procedures for Granting, Relinquishment and Assignment of Ownership Rights over Residential Homes or Housing by Foreigners Resident in Indonesia.

The latest update sets higher minimum prices for foreigners who want to buy landed houses in Yogyakarta, Bali and North Sumatra. Apartment prices in Banten have also been raised.

The increases are as follows:

Landed house:

  • Bali: US$383,000 (IDR 5 billion) from US$230,238 (IDR 3 billion)
  • Yogyakarta: US$383,000 (IDR 5 billion) from US$230,238 (IDR 3 billion)
  • North Sumatra: US$230,238 (IDR 3 billion) from US$153,500 (IDR 2 billion)

Apartments:

  • Banten: US$153,500 (IDR 2 billion) from US$76,700 (IDR 1 billion)

Only the price of apartments in Jakarta has been reduced to US$230,238 (IDR 3 billion) from the initial US$383,000 (IDR 5 billion) to attract buyers.

Related-Reading-Icon-Asean Link RELATED: Industry Spotlight – Identifying Opportunities in ASEAN Real Estate

Malaysia: Regulators Demand Change in Names of Food Products as Precondition for Granting Halal Certification

Malaysian regulators have ordered food products with the word “dog” in its name to be changed. US fast-food chain Auntie Anne’s was served a notice asking it to change the name of its popular snack “Pretzel Dog”. Authorities have suggested renaming it to “Pretzel Sausage”. Regulators have said that food products with the word dog, even though they may not contain dog meat, are confusing to Malaysian consumers. Dogs are considered unclean by Muslims, who comprise 60 percent of Malaysia’s population.

Other restaurants that serve hot dogs or similar products will also have to follow suit. Previously, U.S. chain A&W obtained halal certification by changing the name of its famous root beer to RB, and naming hot dogs and frankfurters as coneys and franks, respectively, on its menu. While some in Malaysia have opposed the change, it indicates the need for foreign companies to do their due diligence, and to be prepared to alter plans based on prevalent regulations in the countries they operate.


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