The Tax Times: Do you Have a Singapore Account? Singapore is Now Automatically Sharing Your Account Information!

Monday, September 19, 2016

Do you Have a Singapore Account? Singapore is Now Automatically Sharing Your Account Information!

On July 25, 2016 we posted Tax Havens Coming Clean and Becoming Transparent, where we discussed that the Inland Revenue Authority of Singapore has issued an e-Tax Guide on the territory's general anti-avoidance rule in Section 33 of the Income Tax Act.

The guide, issued on July 11, 2016, explains the three tests to determine whether the GAAR should apply. It includes examples on actionable avoidance arrangements, namely: the circular flow or round-tripping of funds; the creation of more than one entity for the sole purpose of obtaining a tax advantage; changes to the form of business entity for the sole purpose of obtaining a tax advantage; and the attribution of income that is not aligned with economic reality.

Now Singapore has signed agreements with both the UK and Australia to automatically exchange financial account information under the OECD Common Reporting Standard (CRS). Exchanges with both jurisdictions will start in September 2018, though the supporting customer due diligence obligations will start earlier.

The US and Singapore governments have issued a joint statement affirming closer cooperation on bilateral tax issues. Both countries are discussing a tax information exchange agreement (TIEA) for the automatic exchange of tax information (AEOI), and an intergovernmental agreement (IGA) 'that provides for reciprocal automatic exchange of information with respect to certain financial accounts under the Foreign Account Tax Compliance Act (FATCA). The two countries are to complete negotiations and sign the agreements by the end of 2017.

Do You Have Undeclared Offshore Income?