Singapore Strengthens International Cooperation Framework

The Ministry of Finance, Monetary Authority of Singapore and 

Inland Revenue Authority of Singapore jointly issued a press release on 14 May 2013 on the strengthening of its framework for international cooperation to combat cross-border tax offence .This follows a comprehensive review of the current Exchange of Information (EOI) framework, and represents a further step to enhance cooperation following the changes made in 2009, when Singapore endorsed the internationally agreed Standard for EOI for tax purposes, and since amended the laws to implement the Standard and started renegotiating tax agreements to incorporate the Standard.The Global Forum on Transparency and Exchange of Information for Tax Purposes recently affirmed that Singapore’s practice of EOI has been in line with the Standard.

Singapore will take four key steps that will further strengthen its EOI framework:-

Extend EOI assistance in accordance with the Standard to all existing tax agreement partners, without having to update each bilateral tax agreement individually. The current approach of updating individual agreements is no longer necessary, as most countries have adopted the Standard and have similar EOI requirements. This extension of EOI assistance will be subject to reciprocity.

Sign the Convention on Mutual Administrative Assistance in Tax Matters. Based on the current signatories, the Convention will expand Singapore’s network of EOI partners by 11 jurisdictions, including Brazil and the United States taken together, these two changes will more than double the number of jurisdictions – from 41 to 83 – with which Singapore will be able to exchange information under the Standard.

 Allow IRAS to obtain bank and trust information from financial institutions without having to seek a court order, and without undermining the basic safeguards for taxpayers. IRAS will continue to assess whether the requests are in line with the Standard, and taxpayers will continue to have the right of appeal.

 Conclude an Inter-Governmental Agreement (IGA) with the United States that will facilitate financial institutions in Singapore to comply with the Foreign Account Tax Compliance Act (FATCA), which requires all financial institutions outside of the US to pass information about financial accounts held by US persons to the US Inland Revenue Service on a regular basis.

The IGA will be in the form of Model 1, under which information is exchanged between Singapore and US agencies. The legislative amendments necessary to effect the above changes will be made before the end of 2013.It was also reiterated that Singapore is fully committed to working with international partners to combat cross-border tax offenses, including assistance in connection with the recent disclosure that the tax authorities of Australia, UK and US are investigating complex offshore structures that may be involved in wrong doing .

It was noted that, from 1 July 2013, Singapore will criminalize the laundering of proceeds from serious tax offences.

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