S’pore signs multilateral deals to boost tax cooperation

SINGAPORE — Singapore signed two multilateral agreements to reaffirm the Republic’s commitment on international standards on tax cooperation, the Ministry of Finance said on Wednesday.

Both agreements were signed in the Netherlands by Ms Chia-Tern Huey Min, Singapore’s deputy commissioner for international, investigation and indirect taxes group of the Inland Revenue Authority of Singapore (Iras).

The first agreement commits to have an automatic exchange of financial account information under the common reporting standard (CRS), bringing Singapore on board with more than 90 jurisdictions.

Meanwhile, the second agreement to exchange country-by-country (CBC) reports, joins over 55 jurisdictions including the United States and China to create a network for the automatic exchange of tax information of multinational enterprises (MNEs).

Minister for Finance, Mr Heng Swee Keat said: “As a business and financial hub, Singapore has earned a high level of trust and confidence. We take our commitment to international standards of tax cooperation seriously.

“Signing both the multilateral competent authority agreements will allow Singapore to implement the international tax standards with our bilateral automatic exchange of information (AEOI) partners in an effective and efficient way.”

Mr Leong Sing Chiong, assistant managing director (development and international), the Monetary Authority of Singapore (MAS) said: “The MAS welcomes the greater tax transparency and cooperation the CRS represents.

“Financial institutions in Singapore have been putting in place the systems necessary to implement the CRS in 2018. This higher standard will provide a sound environment for sustained growth of the private banking industry and enable Singapore to remain a clean and trusted financial centre.”

According to the Iras website, the CRS is an internationally agreed standard for AEOI on financial account information, endorsed by the Organisation for Economic Cooperation and Development (OECD) and the Global Forum for Transparency and Exchange of Information for Tax Purposes.

“The CRS sets out the financial account information to be exchanged, the financial institutions (FI) required to report, the different types of accounts and taxpayers covered, as well as the customer due diligence procedures to be followed by FIs,” the website showed.

Major financial centres such as Dubai, Hong Kong, Luxembourg and Switzerland, have endorsed the CRS and will commence AEOI either this year or next year. Singapore has committed to implement the CRS, with the first exchange to take place by September next year.

CBC reporting (CBCR) is a form of reporting by MNEs initiated by OECD in the Base Erosion and Profit Shifting (BEPS) Action 13 Report.

Singapore-headquartered MNEs with consolidated group revenue of at least S$1.125 billion are required to prepare and file CBC reports to Iras for financial years beginning on or after Jan 1 this year.

The CBC reports submitted to Iras will be provided to the tax authorities of countries with which Singapore has established bilateral AEOI relationships. CBC reports may be used by Singapore and other tax authorities in evaluating transfer pricing risks and other BEPS-related risks.

The information, however, cannot be used as a substitute for a detailed transfer pricing analysis of individual transactions and prices, or as the basis for any transfer pricing adjustment, said a Ministry of Finance spokesperson. Angela Teng