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Summary of Responses - Public Consultation on Draft Income Tax (Amendment No. 2) Bill 2016

12 Apr 2016

Over four in five suggestions accepted on the draft Income Tax (Amendment No. 2) Bill 2016

1.         The Ministry of Finance (MOF) held a public consultation exercise on the draft Income Tax Bill 2016 from 1 to 18 March 2016. The proposed amendments to the Income Tax Act (“ITA”) will allow Singapore to implement the Common Reporting Standard (“CRS”)[1] with effect from 1 Jan 2017. This is in line with Singapore’s commitment to commence automatic exchange of financial account information (“AEOI”)[2] under the CRS in 2018.

2.         MOF received a total of 69 suggestions, of which 58 suggestions were accepted. We have made revisions to the draft Income Tax (Amendment No. 2) Bill 2016 or will incorporate them in the subsequent Regulations. The remaining suggestions were not accepted, as they were inconsistent with either the legislative drafting conventions or the policy objectives of the proposed legislative changes.

3.         Most of the feedback received sought clarification on implementation details, particularly with regard to:

  • Implementation of the “Wider Approach"[3] by financial institutions (“FIs”);
  • Sanctions on the account holders for willfully providing false information on their tax residency; and
  • Authorisation and audit requirements to be imposed by the Inland Revenue Authority of Singapore (“IRAS”)

We will provide further details on the implementation details in the Regulations. MOF, IRAS and the Monetary Authority of Singapore (“MAS”) will be introducing draft Regulations for public consultation by mid-2016. The Regulations will include the list of Non-Reporting Financial Institutions and Excluded Accounts, due diligence and reporting requirements to implement the CRS.

4.         MOF would like to thank all individuals and organisations who have taken the time and effort to provide their feedback. Thank you.

12 APRIL 2016

[1] The CRS is an internationally agreed standard for AEOI, endorsed by OECD and Global Forum for Transparency and Exchange of Information for Tax Purposes. The CRS sets out the financial account information to be exchanged, the financial institutions (“FIs”) required to report, the different types of accounts and taxpayers covered, as well as the customer due diligence procedures to be followed by FIs.

[2] AEOI refers to the regular exchange of information between jurisdictions for tax purposes, with the objective of detecting and deterring tax evasion by taxpayers.

[3] FIs to collect and retain the CRS information for all non-Singapore-tax-residents, instead of only from tax residents of jurisdictions with which Singapore has a Competent Authority Agreement.





Summary of key public feedback received on the Income Tax (Amendment No. 2) Bill 2016

1. Implementation of the “Wider Approach” by Financial Institutions (FIs)

(i) Feedback: How is tax residency determined? Does the Wider Approach include only tax residents of jurisdictions which have already committed to adopt AEOI, or does it also include tax residents of all jurisdictions?

MOF’s response: Feedback clarified. The due diligence procedures to be conducted by FIs to establish the Account Holder’s tax residency will be set out in the Regulations. FIs and their customers can refer to the Automatic Exchange Online Portal ( for tax residency rules applicable to the different jurisdictions.

The Wider Approach empowers FIs to collect and retain the CRS information for all non-Singapore tax residents. FIs will be required to identify the status of all non-Singapore tax resident accounts.

However, FIs will only need to report to IRAS information relating to the account holders, who are tax residents of Singapore’s Competent Authority Agreement (“CAA”) partners when there is a CAA in place, in order for IRAS to effect the AEOI under the CRS. This approach avoids the need for FIs to repeatedly review the same accounts to re-establish whether the accounts are reportable each time Singapore enters into a new CAA. The Wider Approach has also been adopted by many jurisdictions such as the UK, Sweden, Japan and Korea.

(ii) Feedback: Reporting the account information on all non-Singapore tax residents to IRAS will ease FIs’ administrative burden to keep track of the list of the jurisdictions which Singapore has a CAA in place and the amendments to it. Furthermore, this reduces the system enhancement complexity for FIs to identify the accounts to be reported to IRAS whenever there are updates to the list of Singapore’s CAA partners.

MOF’s response: Not accepted. A list of Singapore’s CAA partners will be set out in the Regulations and made available on IRAS’ website. Following this, FIs should only report to IRAS information relating to account holders who are tax residents of jurisdictions which are Singapore’s CAA partners.

2. Sanctions on account holders that wilfully provide false information on their tax residency to FIs

(i) Feedback: As account holders are not the only parties who are required to provide self-certification (controlling persons are also to provide the same), the penalty regime should be widened to include other parties in scope.

MOF’s response: Accepted. We will insert a new subsection to clarify that the penalty regime covers all relevant persons who are required to provide information on their tax residency under the CRS.

3. Authorisation and audit requirements imposed by IRAS

(i) Feedback: The new legislation seeks to allow Minister to make regulations to impose procedures or requirements on FIs in order to facilitate implementation of CAA. Respondents asked for clarity on the "authorisation" requirements referenced in the proposed Section 105P(2)(c).

MOF’s response: Accepted. The Bill will be amended to provide clarity that “authorisation” refers to a requirement to inform IRAS if a FI wishes to appoint a third party to help fulfil its CRS obligations.

(ii) Feedback: Respondents suggested that the proposed inclusion of audit requirements be aligned with that of other jurisdictions who have also committed to implementing CRS. 

MOF’s response: Accepted. The intent of such enabling provision is for compliance reviews to be conducted to ensure effective implementation of CRS. This is a requirement of the CRS, which we intend to implement with reference to OECD’s guidance and the audit requirements implemented by other jurisdictions.