International Tax Cooperation
Singapore does not condone cross-border tax evasion.
- Singapore adopts internationally accepted transfer pricing guidelines. Companies are to adopt these guidelines and ensure that profits allocated are commensurate with the activities, functions and risks in Singapore. Singapore also has a well-established programme for bilateral advance pricing agreements with our treaty partners to ensure that the transactions of companies are priced in accordance with the Arm’s Length Principle.
- Singapore is also committed to international tax cooperation. We have and will continue to assist tax authorities to the fullest extent possible. To this end, Singapore adopts the internationally agreed standards for exchange of information.
- Singapore actively works with other jurisdictions, OECD and G20 to counter Base Erosion and Profit Shifting (BEPS). Coordinated global efforts are important for a common set of rules to be applied across tax jurisdictions, thereby ensuring a level playing field so that tax jurisdictions can compete fairly based on their fundamental advantages. This also ensures certainty of international taxation rules for cross-border transactions, so as to avoid double taxation. Singapore’s response to OECD’s recommendations to counter BEPS can be accessed here
Internationally-agreed Standard for Exchange of Information (EOI)
Singapore endorsed the internationally-agreed Standard for Exchange of Information (EOI Standard) in 2009. The EOI Standard sets out how tax jurisdictions should address cross-border tax evasion by entering into effective information sharing arrangements. Since 2009, Singapore has been updating and increasing its network of treaties to be in line with the EOI Standard. In line with developments in international standards and practices, Singapore made further changes in 2013 to strengthen our EOI regime. Details of these changes are in this press release
. The Global Forum on Transparency and EOI have assessed that our EOI regime is “largely compliant” with the international standard, and comparable with the ratings of countries such as the US and the UK. Please refer to this link
for more information.
In 2014, Singapore, along with other major financial centres, committed to implement Automatic Exchange of Information (AEOI) by 2018, after it has been endorsed by the G20 as a new global standard.) Singapore's implementation of AEOI remains guided by the following principles:
a) Singapore will be able to implement AEOI if it is adopted in all key financial centres in Europe and Asia, to avoid regulatory arbitrage;
b) AEOI also needs to be done within a robust framework of law to protect taxpayer confidentiality and ensure that the information is used properly. This is particularly important as AEOI entails the transmission of sensitive taxpayer information which should be safeguarded; and
c) There must be reciprocity with any future AEOI partners in terms of information exchanged. Please refer to this link
for MOF’s response on AEOI.
Convention on Mutual Administrative Assistance in Tax Matters (“Convention”)
Singapore became a signatory of the Convention on 29 May 2013. The Convention was first developed as an OECD-Council of Europe agreement in 1988. It was opened to non-members in 2010. The Convention has been gaining acceptance as an international agreement for bilateral tax cooperation among its signatories and covers several areas of cooperation, including EOI. Singapore deposited its instrument of ratification for the Convention on 20 January 2016. The press release on Singapore’s ratification can be accessed here.