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Singapore pledges to work with overseas tax watchdogs

SINGAPORE — The Singapore Government has pledged to fully assist tax watchdogs from the United Kingdom, United States and Australia, which are examining data which “reveals extensive use of complex offshore structures to conceal assets by wealthy individuals and companies”.

SINGAPORE — The Singapore Government has pledged to fully assist tax watchdogs from the United Kingdom, United States and Australia, which are examining data which “reveals extensive use of complex offshore structures to conceal assets by wealthy individuals and companies”.

Singapore, along with a handful of other places, were cited by UK’s Her Majesty’s Revenue & Customs (HMRC) as territories used by the companies and trusts.

On its website, the HMRC confirmed yesterday in a statement that it was working with the US and Australia on the data.

It said: “The 400 gigabytes of data is still being analysed but early results show the use of companies and trusts in a number of territories around the world including Singapore, the British Virgin Islands, the Cayman Islands, and the Cook Islands. The data also exposes information that may be shared with other tax administrations as part of the global fight against tax evasion.”

Complex offshore structures involve multiple layers of entities which include companies and trusts, and they could be set up for reasons such as asset protection and estate and succession planning purposes.

HMRC commissioner Jennie Granger noted that there is “nothing illegal” about an international structure, especially in a globally integrated economy and these arrangements “may be perfectly legitimate and may already have been declared” to the tax authority.

“However they may involve tax evasion, avoidance or other serious offences by taxpayers. What has to stop is using offshore structures to illegally hide assets and income,” she added.

In a statement last night, the Singapore Government said it is “fully committed” to working with the international community to fight cross-border tax offences. “We stand ready to partner the tax authorities of Australia, UK and US in the investigation of structures that may be involved in wrongdoing,” said a joint statement from the Inland Revenue Authority of Singapore (IRAS), the Ministry of Finance and the Monetary Authority of Singapore. “We understand that the tax authorities of these countries are analysing their data to determine if such structures have been used for any wrongdoing. Singapore will assist them to the fullest extent possible under our laws and tax agreements.”

The Singapore authorities, which noted that the Republic laws and tax agreements are in line with international standards, said they are also looking into whether any tax offences have been committed in Singapore. They have started requesting these tax authorities for the data of entities linked to Singapore to be shared with the Republic. “As part of IRAS’s ongoing programmes to ensure compliance with tax laws in Singapore, IRAS audits and conducts investigations into entities that use offshore structures to conceal income and avoid being taxed here,” said the joint statement.

So far, HMRC has identified more than 100 people who benefit from the offshore structures and a number of these individuals are under investigation for offshore tax evasion. They have also identified more than 200 UK accountants, lawyers and other professional advisors who will also be scrutinised. “The message is simple: if you evade tax, we’re coming after you,” said UK Chancellor of the Exchequer George Osborne.

Mr Osborne added that ahead of UK’s presidency of the G8 this year, British Prime Minister David Cameron has “made it a key priority to drive an international effort to increase transparency and clamp down on tax avoidance and evasion”.

“By working with our international partners in this way, we are again demonstrating our commitment to this work,” Mr Osborne said.

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