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Singapore says equal tax treatment needed for cross border fund agreement

The Monetary Authority of Singapore (MAS) declined to sign up to the Asia Region Funds Passport (ARFP) this week, saying that taxation arrangements that it had previously agreed to had been dropped. 17 Sep 2015

Singapore had been expected to sign a statement of understanding (SOU) on the ARFP at a meeting in the Philippines, AsianInvestor said.

The ARFP, due to be launched next year, will allow fund managers in one member country to offer their funds in another member country that has signed on to the agreement, with a streamlined authorisation process. Singapore has been involved in planning the ARFP since 2013, when it signed a statement of intent along with Australia, New Zealand and the Republic of Korea.

Australia, Japan, Korea, New Zealand, the Philippines and Thailand signed the SOU this week, the ARFP said.

A MAS spokesperson told AsianInvestor that it had felt unable to sign up due to changes in the taxation agreement: "When we signed the statement of intent in 2013, the signatories explicitly commited to reduce the potential impact of taxation arrangements which would otherwise impede the success of ARFP".

"This was consistent with the feedback that the industry gave, where for the ARFP to be successful there needs to be a level playing field. This means that foreign funds offered to investors in a jurisdiction should be subject to similar tax treatments to funds managed locally. The statement of understanding does not address the issue and does not provide any commitment to addressing the impediment of unequal tax treatment," the spokesperson said.

Singapore is still open to joining the ARFP if the tax issue can be resolved, the spokesperson told AsianInvestor. 

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