Singapore and the Exchange of Tax Information08 February In recent months much has been written in relation to Singapore agreeing to the OECD demands regarding the implementation of a standard form exchange of Tax Information Agreement. Although it has been imperative for Singapore to agree to the OECD demands to avoid being "blacklisted"; it has also undertaken a delicate balancing act by ensuring that taxpayer's rights are not eroded. Singapore has achieved this by modifying its domestic legislation to ensure there are enough safeguards so that requests for tax information are not entertained unless stringent conditions are met. Singapore has clearly stated that it will not entertain "fishing expeditions". Most importantly Singapore continues to support its International Finance Centre. Singapore officially joined the OECD "White List" on 19 November 2009. It did this by entering into the requisite number of Taxation Information Exchange Agreements that comply with the current OECD model. To date these agreements have been signed but not ratified, so they do not have the force of law yet. Some of the countries that Singapore has entered into agreements with include France, Belgium, Austria, Mexico and the United Kingdom. For a request for tax information to be considered in Singapore it must be specific, detailed and relevant to the tax affairs of the taxpayer in question. Only information that the requesting jurisdiction would have ordinarily been able to obtain under its own laws had the information actually physically resided in that jurisdiction can be released. The information request must also be in a specific format as contained in the Eighth Schedule of the Income Tax (Exchange of Information) Act (refer to a copy of this Schedule below). As can be seen from the Eighth Schedule there is a lot of information required before the Singapore Authorities will act upon a request. For example, Clause 6 states that the request must include the name and address of any person believed to have possession or control of the information requested. For example, in respect of a request in relation to a Singapore trust the Foreign Authority must know the details of the Trustee Company. It is important to note that trusts are not registered in Singapore and thus this information is not on public record. Further to these standard safeguards, there are additional safeguards for the disclosure of information that is protected by the Banking Act and the Trust Companies Act. Asiaciti Trust Singapore is a licensed Trust Company and thus is subject to these additional safeguards. For Banks and Trust Companies a judicial process will be implemented for the Inland Revenue Authority of Singapore (IRAS) to obtain tax information that is validly requested under a Taxation Information Exchange Agreement. In most circumstances it will require the affected taxpayer and the bank and/or trust company to be notified of the request. IRAS will then be required to make an application to the High Court of Singapore and during this process the taxpayer, bank and/or trust company will have the right to apply for the order to be discharged or varied. This procedure will be implemented to ensure that there is a fair and independent review of the validity of requests. From the above it can be seen that whilst Singapore has agreed to meet the OECD standard in relation to the exchange of tax information, it has taken very strong measures to ensure that the rights of taxpayers are also protected. This will ensure that Singapore retains its reputation as a well-regulated international finance centre.
EIGHTH SCHEDULE Section 105D(2)
|