Moves include easier sharing of tax details and inking US govt deal
By Yasmine Yahya, The Straits Times, 15 May 2013
By Yasmine Yahya, The Straits Times, 15 May 2013
SINGAPORE is getting tougher on cross-border tax cheats by making it easier to share information with other countries.
Among the moves announced yesterday, Singapore said it will sign up to the Organisation for Economic Cooperation and Development's (OECD) multilateral treaty on sharing tax details.
A second change will see Singapore extending help to existing partners under a global standard without having to renegotiate tax agreements. These two changes bring the number of countries with which Singapore can exchange information from 41 to 83.
The tax authorities here will soon no longer need a court order to obtain bank and trust information to help other countries.
The Government will also sign a deal with the United States to make it simpler for financial institutions here to comply with a new US tax law - the Foreign Account Tax Compliance Act - that comes into effect next year.
These moves, announced by the Finance Ministry, Monetary Authority of Singapore (MAS) and Inland Revenue Authority of Singapore, complement an earlier announcement that Singapore will criminalise the laundering of proceeds from serious tax crimes on July 1.
Singapore, Asia's largest private banking and wealth management hub, has been in the spotlight. Earlier, Britain's tax authority said it was studying data that suggested some rich people in Britain, the US and Australia were hiding assets in territories including Singapore to evade tax.
Deputy Prime Minister Tharman Shanmugaratnam noted in a statement yesterday that the new standards can work only if all jurisdictions subscribe to them.
He added that Singapore will work with its international partners to ensure there is no room for regulatory arbitrage.
"There is no conflict between high standards of financial integrity and keeping our strengths as a centre for managing wealth," said Mr Tharman, who is also Finance Minister and MAS chairman.
"Singapore will continue to be a vibrant wealth management centre, with laws and rules that safeguard legitimate funds and reject tainted money," he added.
The moves were praised by Mr Pascal Saint-Amans, director of OECD's Centre for Tax Policy.
"This is a very significant move. Not only has Singapore decided to streamline its practice to exchange information on request, but it also will be exchanging information automatically with the US," he told Reuters.
Baker & McKenzie.Wong & Leow's managing principal Edmund Leow said: "These steps make it clear that Singapore is not going to help tax evaders hide."
Singapore has been stepping up efforts to combat tax crimes.
In 2009, it adopted a global standard for the exchange of information for tax purposes. Since then, it has amended laws and renegotiated several tax agreements to incorporate it.
Last month, the Global Forum on Transparency and Exchange of Information for Tax Purposes said Singapore's practices were in line with the standard.
Some of the latest moves will put Singapore ahead of other financial centres, for example when it signs the OECD's Convention on Mutual Administrative Assistance in Tax Matters which allows for exchange of information. The US is a signatory but Hong Kong and Switzerland have yet to sign.
The changes will be enacted into law by the end of the year.
Thumbs up for govt measures to fight tax evasion
By Alvin Foo, The Straits Times, 15 May 2013
By Alvin Foo, The Straits Times, 15 May 2013
INDUSTRY players and experts welcomed Singapore's latest moves to strengthen its international framework for working to combat tax evasion.
The steps boost the country's credentials as an open and transparent financial centre, they said.
Singapore International Chamber of Commerce chief executive Phillip Overmyer said: "It gives us greater transparency in our financial services industry, and allows Singapore a good opportunity to align tax compliance issues. It makes us look more like a world-class financial centre."
The Association of Banks in Singapore said: "It's consistent with Singapore's decision to make tax evasion a predicate offence to money laundering."
Singapore announced several measures aimed at cracking down on cross-border tax cheats. They include expanding the list of nations with which it can exchange information for tax-related investigations, and allowing the local tax authorities to get bank and trust information to aid other countries in investigations without first obtaining a court order.
The Government will also sign an agreement with the United States that will make it simpler for financial institutions here to comply with a new US tax law - the Foreign Account Tax Compliance Act (Fatca) - which will take effect next year.
Mr Stefano Demichelis, Kroll Advisory Solutions associate managing director, said these steps were part of efforts worldwide to clamp down on tax evasion.
The moves also complement ongoing work by the Private Banking Industry Group (PBIG) to "protect Singapore's reputation as a clean and efficient global financial centre" by promoting best practices in the sector, said Mr Deepak Sharma, chairman of Citi Private Bank Singapore and PBIG co-chair.
He added that the industry adopted a code of conduct in April 2011 and industry-sound practices in March this year to detect and report illicit flows of money.
Banks said having a model in which information is exchanged between Singapore and US agencies directly would make it easier for them to comply with Fatca.
"The agreement will benefit financial institutions by addressing local legal impediments, simplifying practical implementation and reducing the risk of being non-compliant," said Standard Chartered Bank Singapore head of compliance Wee Seng Hong.
"These enhancements will help further ease administrative aspects," said Deutsche Bank's head of asset and wealth management (Asia-Pacific) Ravi Raju.
The more robust framework also reaffirms Singapore's reputation as a financial centre with the highest standards of transparency and integrity, said Ms Koh Ching Ching, OCBC Bank's head of group corporate communications.
Chief executive officer of UBS Wealth Management Singapore Edmund Koh added: "It's critical that the regulators and all industry players work hand in hand to safeguard its reputation as a safe and well-regulated wealth management hub."