16 May 2013Accounting & tax analysis

Singapore to strengthen tax framework

The Monetary Authority of Singapore (MAS) has announced its intention to “significantly” strengthen its framework for tax cooperation and ending cross-border tax offences, joining a range of offshore domiciles intent on signalling their compliance with tax law.

According to the MAS they will take four key steps to strengthen their Exchange of Information framework. The MAS will extend EOI assistance to all existing tax agreement partners without individually updating their bilateral tax agreements; they will sign the Convention on Mutual Administrative Assistance in Tax Matters, expanding Singapore’s network of EOI partners by 11 jurisdictions including Brazil and the US; allow the Inland Revenue Authority of Singapore to obtain bank and trust information from financial institutions without seeking a court order; and conclude an Inter-Governmental Agreement with the US that will facilitate compliance with the Foreign Account Tax Compliance Act, a US law requiring all financial institutions to pass information about financial accounts held by anyone earning money in the US.

The legislative changes required to effect the planned changes by the end of the year.

Singapore’s Deputy Prime Minister and Minister for Finance, 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. "

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.”