MOF Seeks Public Feedback on Draft Legislative Amendments to Implement the Internationally Agreed Standard for Exchange of Information

The Ministry of Finance is seeking comments on the draft Income Tax (Amendment) (Exchange of Information) Bill for the period of 29 June 2009 to 28 July 2009. The Bill proposes amendments to the Income Tax Act, as well as consequential amendments to the Goods and Services Act and Stamp Duties Act, to allow Singapore to enter into Avoidance of Double Taxation Agreements (DTAs) that incorporate the new internationally agreed Standard on the exchange of information (EOI) for tax purposes.

2. On 6 March 2009, Singapore endorsed the Organisation for Economic Cooperation and Development's (OECD) 2008 Standard for the effective exchange of information through Avoidance of Double Taxation Agreements (DTAs). We decided to do so, as this OECD Standard has become an internationally agreed standard following its endorsement by the United Nations Committee of Tax Experts on International Cooperation in Tax Matters in October 2008.

3. To implement the new internationally agreed standard ('the Standard'), Singapore will seek to amend its domestic laws to allow it to extend further cooperation on information exchange through DTAs which incorporate the Standard. The negotiation and conclusion of such DTAs will be based on a mutual balance of benefits.

4. The legislative provisions under the draft Bill will allow IRAS to provide information, including information held by a bank or trust company, in response to bona fide requests made under DTAs which incorporate the Standard. Under such DTAs, IRAS' access to information will not be limited to whether the information request relates to a Singapore tax matter ? i.e. the domestic interest requirement will be lifted. Such provisions will enhance the level of assistance that Singapore can provide to foreign jurisdictions under DTAs which incorporate the Standard, and vice versa.

5. The draft Bill also provides for procedures to ensure that only information requests that are clear,specific, relevant, and consistent with the new internationally agreed Standard can be acceded to. The Standard allows the requested jurisdiction to reject requests that are frivolous or spurious in nature or ?fishing expeditions? by the requesting jurisdiction.

6. The proposed amendments are in keeping with Singapore's status and reputation as a trusted and responsible business and financial hub with substantive economic activities. Other financial centres such as Hong Kong, Switzerland and Luxembourg have announced similar plans. By implementing the new internationally agreed Standard in tandem, international cooperation on the matter can be enhanced while preserving a level playing field amongst financial centres.

7. The public can access the consultation documents together with the explanations for the draft Income Tax (Amendment) (Exchange of Information) Bill on the Ministry of Finance's website (www.mof.gov.sg/Public-Consultation/Public-Consultation-Open) as well as the REACH consultation portal (www.reach.gov.sg). Respondents may send their comments to the Ministry of Finance directly via the website, email, fax or post. All feedback should reach the Ministry by 28 July 2009.

MINISTRY OF FINANCE