Press Releases

1. Singapore is significantly strengthening its framework for international cooperation to combat cross-border tax offences.

2. This follows a comprehensive review of the current Exchange of Information (EOI) framework, and represents a further, major step to enhance cooperation following the changes made in 2009. Singapore had then endorsed the internationally agreed Standard for EOI for tax purposes (hereafter referred to as the “Standard”). Since then, we had amended our laws to implement the Standard and started renegotiating our tax agreements to incorporate the Standard. The Global Forum on Transparency and Exchange of Information for Tax Purposes (“the Global Forum”) has recently affirmed that Singapore’s practice of EOI has been in line with the Standard.

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

a) Extend EOI assistance in accordance with the Standard to all our existing tax agreement partners, without having to update individually our bilateral tax agreements with them. 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.

b) Sign the Convention on Mutual Administrative Assistance in Tax Matters. This was first developed as an OECD-Council of Europe agreement, and has recently been promoted as an international agreement for bilateral tax cooperation among the Convention’s signatories. There are currently 45 signatories to the Convention. Based on these current signatories, the Convention will expand Singapore’s network of EOI partners by 11 jurisdictions, including Brazil and the United States.

Taken together, the above two changes will more than double the number of jurisdictions - from 41 to 83 - that Singapore will be able to exchange information with under the Standard.

c) Allow IRAS to obtain bank and trust information from financial institutions without having to seek a Court Order. While Singapore has been able to respond promptly to most requests for information from its foreign partners, removing the requirement for a Court Order will further streamline the administration of EOI under the Standard. It will not undermine the basic safeguards to 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.

d) Conclude with the United States an Inter-Governmental Agreement (IGA) that will facilitate financial institutions in Singapore to comply with the Foreign Account Tax Compliance Act (FATCA). FATCA is a US law which requires all financial institutions outside of the US to pass information about financial accounts held by US persons to the US Internal Revenue Service (US IRS) on a regular basis. The IGA will be in the form of Model 1, under which information is exchanged between Singapore and US agencies^[1]. The Model 1 IGA will help ease the compliance burden of financial institutions in Singapore with FATCA.

4. Singapore’s Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam said: “These changes we are now making are a major enhancement, in step with the strengthening of international standards for exchange of information. But new standards can only work if all jurisdictions subscribe to them. Singapore will work with our international partners to achieve just that, and ensure there is no room for regulatory arbitrage. "

5. DPM Tharman, who is also Chairman of the Monetary Authority of Singapore, added, “There is no conflict between high standards of financial integrity and keeping our strengths as a centre for managing wealth. Singapore will continue to be a
vibrant wealth management centre, with laws and rules that safeguard legitimate funds and reject tainted money.”

6. Singapore will make the legislative amendments necessary to effect the above changes, before the end of this year.

7. The above changes are part of the progressive steps Singapore is taking to enhance our EOI framework, since endorsing the Standard in 2009. The changes also come after measures introduced by the Monetary Authority of Singapore since 2011^[2] to ensure that Singapore’s financial system is not used to harbour illegitimate funds or as a conduit for the flow of undeclared assets. From 1 July 2013, Singapore will criminalise the laundering of proceeds from serious tax offences^[3].

8. Singapore is fully committed to working with our international partners to combat cross-border tax offences. This includes 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 wrongdoing. Our current laws and tax agreements already allow for assistance, in connection with such wrongdoings if any.

ISSUED BY
MINISTRY OF FINANCE
MONETARY AUTHORITY OF SINGAPORE
INLAND REVENUE AUTHORITY OF SINGAPORE

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^[1] Model I establishes a framework of reporting account information of US persons by financial institutions to the relevant domestic Authority which in turn provides the information to the US Internal Revenue Service. Please refer to Annex (144 KB) for more details.

^[2] In Sep 2011, in response to withholding tax treaties being negotiated and signed in Europe, MAS had preemptively directed FIs in Singapore to guard against possible inflows of illicit funds arising from such developments.

^[3] This is in line with global standards against money laundering and terrorism financing. FIs have been alerted since October 2011 on this new requirement. They have been directed by MAS to review their existing client and asset pools to ensure compliance with this requirement. FIs must reject prospective clients where there are reasonable grounds to suspect that the client’s assets are the proceeds of serious crimes, including wilful and fraudulent tax evasion.