SINGAPORE: Singapore has asked financial institutions to establish the tax residency status of all their account holders and report some of the financial data to authorities, as new rules on financial data sharing kick in to fight tax evasion.
Singapore from Jan. 1 began complying with the Common Reporting Standard (CRS), an internationally agreed standard which would allow countries to automatically exchange financial data for tax purposes.
Offshore wealth centres Singapore, Switzerland and Hong Kong are among the over 100 jurisdictions who have committed to start exchanging information to combat tax evasion by 2018, in an initiative led by the Organisation for Economic Cooperation and Development (OECD).
Singapore’s tax authorities said account holders of financial institutions such as banks and insurance firms, should provide the institutions with information to establish their tax residency status when asked.
The institutions will report to the Inland Revenue Authority of Singapore the information of account holders who are tax residents of jurisdictions with whom Singapore has signed agreements to share data from 2018.
Singapore has signed such agreements with a number of countries such as Australia and Britain, but is yet to sign a bilateral agreement with Indonesia, whose citizens are the biggest clients for the city state’s private banks.
Singapore’s private banking industry faced pressure last year from an Indonesian tax amnesty that came amid heightened global scrutiny over undeclared wealth.