Singapore's Finance Ministry said the revised tax treaty between Singapore and China would enter into force today following completion of the ratification process by both countries. It replaces the current treaty that has been in force since December 1986 and brings withholding tax rates into line with those under the recent Chinese treaty with Hong Kong. The revised treaty was signed in Singapore by Chinese Vice Premier Wu Yi and Singapore's Commissioner of Inland Revenue Moses Lee on 11 July. With the ratification, the provisions of the treaty will have effect on income derived on or after January next year. Under the revised agreement, withholding tax rate on dividends will be reduced from 7 per cent for corporate shareholders holding at least 25 per cent of a company's share capital and 12 per cent for other shareholders, to 5 per cent and 10 per cent respectively. In addition, gains from the sales of shares in Chinese companies will be subject to tax in China only if the person making the sale has held at least 25 per cent of the share capital of the company in the past 12 months. "It will further strengthen the economic links between the two countries by facilitating the cross-flow of trade, investment, financial activities and technical know-how and expertise between Singapore and China," said the Finance Ministry. Singapore has tax treaties in force with more than 60 countries to date.