International Tax Cooperation
Singapore does not condone cross-border tax evasion.
- Singapore adopts internationally accepted transfer pricing guidelines. Businesses are to adopt these guidelines and ensure that profits allocated are commensurate with the associated functions, assets and risks in Singapore. Our laws require businesses to maintain contemporaneous records to demonstrate their compliance with the transfer pricing guidelines. Singapore also runs a well-established programme for bilateral advance pricing agreements with our treaty partners to ensure that transactions of businesses with related parties 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, large or small, developed or developing, 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 and promote global growth. Singapore’s response to OECD’s recommendations to counter BEPS can be accessed here.
Internationally-agreed Standards 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. Singapore’s exchange of information upon request regime has been rated as compliant with international tax transparency standards, by the Global Forum on Transparency and EOI for Tax Purposes. This is the highest overall rating a jurisdiction can receive. Please refer to this link for more information.
In 2014, Singapore, along with other major financial centres, committed to implement the Common Reporting Standard for Automatic Exchange of Financial Account 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 is reciprocity with any future AEOI partners in terms of information exchanged.
Please refer to this link for MOF’s response on AEOI.
In September 2018, Singapore commenced AEOI with over 60 jurisdictions.
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.