According to the definition of the World Trade Organization (WTO), free trade agreements (FTAs) are agreements between countries that constitute agreements aimed at eliminating all major obstacles to the development of trade between countries and establishing a strong economic relationship between States Parties. Introduction to tax treaties across Asia In this issue of Asia Briefing Magazine, we see the different types of trade and tax treaties that exist between Asian nations. These include bilateral investment agreements, double taxation treaties and free trade agreements that have a direct impact on companies operating in Asia. Other ASEAN treaties are being negotiated, including with Japan, which already has a series of far-reaching economic partnerships, while South Korea already has a free trade agreement. Both are similar to the above – the more than 90% reduction in all goods traded between ASEAN and these countries. ASEAN has a similar free trade agreement with India, which is being phased in and is in the process of reducing tariffs to 90% of all goods traded between ASEAN and India. From 2016, import and export tariffs on more than 4,000 products will be abolished. This will have a similar effect to that of the China Free Trade Agreement, as it opens up the Indian consumer market to ASEAN industrial products. Indeed, India has a considerable middle-class consumer market of around 250 million, although it is not growing as fast in the short term as China.
The ASEAN-India Free Trade Agreement will also be extended to services, discussions are already at an advanced stage and a conclusion is expected before the end of the year. For more details on the ASEAN-India Free Trade Agreement, click here. The provisions of the DBA apply to persons domiciled in one or two Contracting States. For more information on the agreement between Singapore and Thailand for the avoidance of double taxation and the avoidance of tax evasion in the context of income tax, see IRAS. READ MORE ASEAN has concluded a series of free trade agreements with other Asian countries that are radically changing the global landscape of government procurement and manufacturing. It has, for example, a contract with China that effectively eliminated tariffs reduced to nearly 8,000 product categories or 90% of goods imported at zero. These favourable conditions have entered into force in China and in ASEAN home members such as Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Apart from the China-India Free Trade Agreement, ASEAN also has a combined free trade agreement with Australia and New Zealand, known as AANZFTA.