Moves include easier sharing of tax details and inking US govt deal
By Yasmine Yahya, The Straits Times, 15 May 2013
By Yasmine Yahya, The Straits Times, 15 May 2013
SINGAPORE is getting tougher on cross-border tax cheats by making it easier to share information with other countries.
Among the moves announced yesterday, Singapore said it will sign up to the Organisation for Economic Cooperation and Development's (OECD) multilateral treaty on sharing tax details.
A second change will see Singapore extending help to existing partners under a global standard without having to renegotiate tax agreements. These two changes bring the number of countries with which Singapore can exchange information from 41 to 83.
The tax authorities here will soon no longer need a court order to obtain bank and trust information to help other countries.
The Government will also sign a deal with the United States to make it simpler for financial institutions here to comply with a new US tax law - the Foreign Account Tax Compliance Act - that comes into effect next year.
These moves, announced by the Finance Ministry, Monetary Authority of Singapore (MAS) and Inland Revenue Authority of Singapore, complement an earlier announcement that Singapore will criminalise the laundering of proceeds from serious tax crimes on July 1.
Singapore, Asia's largest private banking and wealth management hub, has been in the spotlight. Earlier, Britain's tax authority said it was studying data that suggested some rich people in Britain, the US and Australia were hiding assets in territories including Singapore to evade tax.
Deputy Prime Minister Tharman Shanmugaratnam noted in a statement yesterday that the new standards can work only if all jurisdictions subscribe to them.
He added that Singapore will work with its international partners to ensure there is no room for regulatory arbitrage.
"There is no conflict between high standards of financial integrity and keeping our strengths as a centre for managing wealth," said Mr Tharman, who is also Finance Minister and MAS chairman.
"Singapore will continue to be a vibrant wealth management centre, with laws and rules that safeguard legitimate funds and reject tainted money," he added.
Deputy Prime Minister Tharman Shanmugaratnam noted in a statement yesterday that the new standards can work only if all jurisdictions subscribe to them.
He added that Singapore will work with its international partners to ensure there is no room for regulatory arbitrage.
"There is no conflict between high standards of financial integrity and keeping our strengths as a centre for managing wealth," said Mr Tharman, who is also Finance Minister and MAS chairman.
"Singapore will continue to be a vibrant wealth management centre, with laws and rules that safeguard legitimate funds and reject tainted money," he added.
The moves were praised by Mr Pascal Saint-Amans, director of OECD's Centre for Tax Policy.
"This is a very significant move. Not only has Singapore decided to streamline its practice to exchange information on request, but it also will be exchanging information automatically with the US," he told Reuters.
Baker & McKenzie.Wong & Leow's managing principal Edmund Leow said: "These steps make it clear that Singapore is not going to help tax evaders hide."
"This is a very significant move. Not only has Singapore decided to streamline its practice to exchange information on request, but it also will be exchanging information automatically with the US," he told Reuters.
Baker & McKenzie.Wong & Leow's managing principal Edmund Leow said: "These steps make it clear that Singapore is not going to help tax evaders hide."
Singapore has been stepping up efforts to combat tax crimes.
In 2009, it adopted a global standard for the exchange of information for tax purposes. Since then, it has amended laws and renegotiated several tax agreements to incorporate it.
Last month, the Global Forum on Transparency and Exchange of Information for Tax Purposes said Singapore's practices were in line with the standard.
Some of the latest moves will put Singapore ahead of other financial centres, for example when it signs the OECD's Convention on Mutual Administrative Assistance in Tax Matters which allows for exchange of information. The US is a signatory but Hong Kong and Switzerland have yet to sign.
The changes will be enacted into law by the end of the year.
Thumbs up for govt measures to fight tax evasion
By Alvin Foo, The Straits Times, 15 May 2013
By Alvin Foo, The Straits Times, 15 May 2013
INDUSTRY players and experts welcomed Singapore's latest moves to strengthen its international framework for working to combat tax evasion.
The steps boost the country's credentials as an open and transparent financial centre, they said.
Singapore International Chamber of Commerce chief executive Phillip Overmyer said: "It gives us greater transparency in our financial services industry, and allows Singapore a good opportunity to align tax compliance issues. It makes us look more like a world-class financial centre."
The Association of Banks in Singapore said: "It's consistent with Singapore's decision to make tax evasion a predicate offence to money laundering."
Singapore announced several measures aimed at cracking down on cross-border tax cheats. They include expanding the list of nations with which it can exchange information for tax-related investigations, and allowing the local tax authorities to get bank and trust information to aid other countries in investigations without first obtaining a court order.
The Government will also sign an agreement with the United States that will make it simpler for financial institutions here to comply with a new US tax law - the Foreign Account Tax Compliance Act (Fatca) - which will take effect next year.
Mr Stefano Demichelis, Kroll Advisory Solutions associate managing director, said these steps were part of efforts worldwide to clamp down on tax evasion.
The moves also complement ongoing work by the Private Banking Industry Group (PBIG) to "protect Singapore's reputation as a clean and efficient global financial centre" by promoting best practices in the sector, said Mr Deepak Sharma, chairman of Citi Private Bank Singapore and PBIG co-chair.
He added that the industry adopted a code of conduct in April 2011 and industry-sound practices in March this year to detect and report illicit flows of money.
Banks said having a model in which information is exchanged between Singapore and US agencies directly would make it easier for them to comply with Fatca.
"The agreement will benefit financial institutions by addressing local legal impediments, simplifying practical implementation and reducing the risk of being non-compliant," said Standard Chartered Bank Singapore head of compliance Wee Seng Hong.
"These enhancements will help further ease administrative aspects," said Deutsche Bank's head of asset and wealth management (Asia-Pacific) Ravi Raju.
The more robust framework also reaffirms Singapore's reputation as a financial centre with the highest standards of transparency and integrity, said Ms Koh Ching Ching, OCBC Bank's head of group corporate communications.
Chief executive officer of UBS Wealth Management Singapore Edmund Koh added: "It's critical that the regulators and all industry players work hand in hand to safeguard its reputation as a safe and well-regulated wealth management hub."
Chief executive officer of UBS Wealth Management Singapore Edmund Koh added: "It's critical that the regulators and all industry players work hand in hand to safeguard its reputation as a safe and well-regulated wealth management hub."
Tax haven? Singapore is 'just efficient'
Tax expert says nothing wrong with rich keeping money in stable banks
By Christopher Tan, The Straits Times, 18 May 2013
JUST because Singapore is the fourth-largest fund management centre in the world does not mean it is a haven for tainted funds, says a top tax expert.
Speaking to The Straits Times in the aftermath of information leakage from a trust company based in Singapore, tax lawyer Gurhachan Singh said the wealthy simply prefer countries like Singapore because "we are efficient".
Tax expert says nothing wrong with rich keeping money in stable banks
By Christopher Tan, The Straits Times, 18 May 2013
JUST because Singapore is the fourth-largest fund management centre in the world does not mean it is a haven for tainted funds, says a top tax expert.
Speaking to The Straits Times in the aftermath of information leakage from a trust company based in Singapore, tax lawyer Gurhachan Singh said the wealthy simply prefer countries like Singapore because "we are efficient".
The International Consortium of Investigative Journalists last month named Singapore's Portcullis TrustNet in an expose on tax dodgers and their offshore accounts.
Mr Singh, managing partner at KhattarWong, sees the saga as yet another attempt by Western economies to "get as much money back to their own countries as possible", and to stem further capital outflows.
"They have social security schemes, free education, health, employment benefits... living on credit, spending tomorrow's money today," Mr Singh said.
Over the years, and especially after the 2008 financial meltdown, companies and individuals "are taking money and putting them in efficient, protective and secure environments".
"No one supports tax evasion," said Mr Singh. "But there's nothing wrong with tax planning. It's perfectly legitimate.
"If you want to put money in banks that are strong and stable, instead of those which have been rescued by governments, there's nothing wrong with that either.
"An efficient tax regime does not equate with tax haven," he added. "Low tax is not no tax."
Commenting on new laws coming into effect in July that will make money laundering and tax evasion "predicate offences" which attract stiffer penalties, the 35-year tax veteran said Singapore has to strike a balance between complying with international tax treaties and preserving its position as a financial hub.
"Singapore has the right balance of rules," he said. "Anything more and we will become intrusive to the public."
Mr Singh reckons that as much as banks will act to make sure they comply with the new rules, it will be difficult for them "to ascertain whether funds in their accounts are taxable elsewhere".
For starters, there are vastly differing rules across the globe concerning what is taxable and what is not, and to what degree and scale, he said.
He does not think "banks will empty half their accounts before July", as most would already have had due diligence processes.
On Singapore's latest move to sign an Organisation for Economic Cooperation and Development exchange of information treaty, Mr Singh has his reservations.
One key stipulation in the agreement says that jurisdictions can ask for bank account information without a court order.
"In my view, the earlier High Court order route was balanced," he said, adding that individuals or companies should have the legal right to refuse disclosure.
"There is a world of difference between having nothing to hide, and having the whole world know about me," Mr Singh said. "People want privacy."
And any request for information should not be seen as suspicion. At the end of the day, Mr Singh said tax evasion cases are hard to prove.
"You need to prove 'wilful intent to evade' before it is a predicate offence," he said.
"If I wrongly assumed something is not taxable... that is not tax evasion."
"You need to prove 'wilful intent to evade' before it is a predicate offence," he said.
"If I wrongly assumed something is not taxable... that is not tax evasion."
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