Overviews
The international financial center undoubtedly lures people due to its robust and solid economy. Nearly 50% of all expats in Singapore relocated to advance their professions. While more than a quarter merely sought a challenge, a significant majority (38%) desired to increase their income.
To maintain this attraction, the Singaporean government actively dedicates itself to global norms for transparency and tax cooperation under the OECD’s Common Reporting Standard (CRS). In 2018, it activated 61 Automatic Exchange of Financial Account Information (AEOI) links. As a result, Singapore will annually exchange bank account information with these nations, often going back as far as 1 January 2017. Covered institutions will also have the obligation to supply CRS information for these nations starting in 2018.
Financial data that must be reported regarding reportable accounts under the CRS includes interest, dividends, account balance, income from specific insurance products, sales proceeds from financial assets, and other income generated with respect to assets held in the account or payments made with respect to the account.
Reportable accounts include those owned by individuals and organizations, such as trusts and foundations. Additionally, the CRS contains a requirement for financial institutions to “look through” passive entities to report on the relevant controlling persons.
Singapore: ideal destination
Singapore is the finest location for any investor to expand their business and their footprint in Asia due to its business-friendly atmosphere, world-class infrastructure, and extremely competitive tax system.
The Economic Expansion Incentives (Amendment) Act 2018 was put into effect by the government in May in order to preserve this competitive climate while adhering to the OECD’s Base Erosion and Proft Shifting (BEPS) initiative.
These allow for the exclusion of intellectual property rights revenue from the Pioneer Service Companies Incentive and Development and Expansion Incentive schemes’ tax relief provisions. The new Intellectual Property Development Incentive that Singapore implemented on July 1st, 2018, which is in line with the “modified nexus” approach under Action 5 of the BEPS, necessitated the adjustment.
Singapore ratified the Multilateral Convention in December 2018 as well.
Implement tax treaty-related preventative measures. This became effective on April 1st for Singapore and is a crucial step in safeguarding Singapore’s treaty network against BEPS operations.
After an OECD Global Forum peer evaluation in October 2018, Singapore’s exchange of information upon request (EOIR) system received the certification of compliance with global tax transparency criteria. The Global Forum stated that it regards Singapore as a significant and trustworthy partner, affirming that Singapore has the necessary regulations in place that require the release of all pertinent information.
Singapore ratified new double taxation agreements with Tunisia, Brazil, Kenya, and Gabon during the year. In November, it also agreed to a reciprocal Foreign Account Tax Compliance Act Model 1 Intergovernmental Agreement and a Tax Information Exchange Agreement (TIEA).
Singapore and the US will be able to communicate tax information thanks to the TIEA.
According to the reciprocal IGA, the countries automatically exchange bank account information in relation to the US Foreign Account Tax Compliance Act (FATCA). When the new reciprocal IGA goes into effect, it will replace the current non-reciprocal IGA.
