Singapore has agreed to adopt new measures that will make it easier for the country to share information on potential tax evaders with other countries.
The island’s tax authority will also no longer need a court order to obtain bank and trust information requested by other nations, the Finance Ministry, central bank and Inland Revenue Authority of Singapore said in a joint statement.
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Singapore, keen to avoid the kind of onslaught on tax cheats being waged against Switzerland, said it will sign up to the Organisation for Economic Cooperation and Development’s (OECD) multilateral treaty on sharing tax details sometime this year.
The OECD’s Convention on Mutual Administrative Assistance in Tax Matters provides a multilateral basis for a wide variety of administrative assistance, including information exchange on request, automatic exchange of information, simultaneous tax examinations and assistance in the collection of tax debts.
Singapore’s decision follows a review of the country’s current framework to co-operate with other countries after endorsing the internationally agreed standard for exchange of information for tax purposes in 2009.
Once the OECD-related measures are in place, Singapore will meet the international standards on tax information sharing with up to 83 different jurisdictions, up from the current 41. Those new countries include the United States and Brazil.
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By GlobalDataThe OECD has welcomed Singapore’s decision to strengthen its international tax cooperation framework, describing it as a ‘very significant move’ to improve information exchange.
Singapore also announced plans to finalise an agreement with the US on the Foreign Account Tax Compliance Act (FATCA), which forces foreign banks and other financial institutions to tell the US government about accounts they hold for Americans with more than US$50,000 in them.
The island plans to adopt a "Model 1" type agreement so that banks can provide the details of American account holders to the Singapore tax authority, that will pass on the information to the US.
Currently, Singapore is bringing in stricter rules that compel financial institutions to identify accounts they strongly suspect of being wilful tax evasion measures, and where necessary, to close them before 1 July 2013.
