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Singapore signs agreements on tax cooperation

Singapore has signed two multilateral competent authority agreements (MCAAs) to improve tax cooperation with other countries, the Ministry of Finance has said.22 Jun 2017

The agreements are on the automatic exchange of financial account information under the Common Reporting Standard (CRS), and the exchange of country-by-country (CbC) reports.

Singapore will continue follow the principles for establishing automatic exchange of information (AEOI) relationships for both CRS and CbC. These principles protect the confidentiality of the information exchanged and prevent its unauthorised use, and ensure full reciprocity, the Ministry of Finance said.

In the case of CRS, Singapore will also want to ensure that there is a level playing field among all major financial centres, it said.

"Singapore will consider engaging in automatic exchange of financial account information with regional jurisdictions which have the safeguards to ensure the confidentiality of information exchanged, and have similar agreements in place with relevant financial centres, including Hong Kong and Switzerland," the Ministry of Finance said.

Minister for Finance Heng Swee Keat said: "As a business and financial hub, Singapore has earned a high level of trust and confidence. We take our commitment to international standards on tax cooperation seriously. Signing both MCAAs will allow Singapore to implement the international standards with our bilateral AEOI partners in an effective and efficient way."

Tax expert Valerie Wu of Pinsent Masons MPillay, the Singapore joint venture partner of Pinsent Masons, the law firm behind Out-Law.com said: "This is a closely watched space, given that banks have already started collecting data. Of particular interest is when will Singapore enter into agreements with its neighbouring countries - any party who may potentially want to streamline their reporting obligations should take the opportunity to plan and align their personal and business succession plans and structures now."

The CRS came into force at the start of this year in Singapore, and financial institutions were told they must establish customers' tax residency statuses under the new rules.