In another sign of the growing movement toward international tax transparency, Singapore has announced that will take steps to expand its exchange of financial information with other countries. Four steps were outlined in a joint statement issued by Singapore’s Ministry of Finance, Monetary Authority and Inland Revenue Authority that will bring the country into closer alignment with international standards for fighting tax evasion.
First, all bilateral Singapore tax treaties will adopt the Organisation for Economic Co-operation and Development’s standard on information exchange, provided the other party to the treaty reciprocates. This will be done without having to update each treaty individually.
Singapore also intends to sign the OECD and European Council’s Convention on Mutual Administrative Assistance in Tax Matters. The convention currently has 45 signatories.
Singapore says that these two steps will more than double – from 41 to 83 – the number of jurisdictions with which it will be able to exchange information under the OECD’s standard.
Singapore also announced that it plans to give its Inland Revenue Authority the power to obtain bank and trust information to provide to foreign tax authorities without first getting a court order. The Singapore government’s news release says that this “will not undermine the basic safeguards to taxpayers” and that taxpayers will have the right to appeal.
Finally, Singapore also intends to sign an intergovernmental agreement with the United States to require Singapore financial institutions to comply with reporting requirements under the US Foreign Account Tax Compliance Act (FATCA).
In a news release announcing the changes, Singapore’s Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam said, “Singapore will continue to be a vibrant wealth management centre, with laws and rules that safeguard legitimate funds and reject tainted money.”
Since 2009, Singapore has been working to bring its law into line with international standards and fight the perception that it is a tax haven. In 2011, Singapore introduced measures to ensure that Singapore’s financial system is not used to harbour illegitimate funds or undeclared assets. Starting in July, Singapore will criminalise money laundering.
—Alistair Nevius (email@example.com) is editor-in-chief, tax for CGMA Magazine.