Tougher national tax legislation is just a start.
According to Colin Ng & Partners Manisha Rai, Raphael Bloch and Bill Jamieson, Singapore is moving fast to improve its regulatory framework and network of cooperation treaties in order to ensure its compliance with international standards on mutual exchange of information and on repression of tax offences.
Singapore actions on the international scene, they said are concomitant with recent developments to designate tax crimes as money laundering predicate offences creating new obligations for financial institutions.
Here are Singapore's 3 important local and international undertakings:
1. Singapore Signed Convention on Mutual Administrative Assistance in Tax Matters on May 29, 2013.
It's a Convention drafted by the OECD in order to enhance the international cooperation on the exchange of tax related information but also to facilitate the collection of taxes among the signatories. This Convention has now been entered into by 55 countries and 6 other agreed to sign it soon1.
2. Singapore announced on 14 May 2013 in a joint statement from the Ministry of Finance (MOF), the Inland Revenue Authority of Singapore (IRAS) and the Monetary Authority of Singapore (MAS) that it will implement the following measures:
Extend EOI assistance; Obtain bank and trust information from financial institutions without having to seek a Court Order;and FATCA Inter-Governmental Agreement.
3. In October 2012, MAS issued a consultation paper to seek feedback on the designation as from 1 July 2013 of tax crimes as money laundering (ML) predicate offences.
According to Colin & Ng, this change of status will have a substantial impact for Singapore financial institutions (FI) including inter alia banks, insurance companies and market license holders. FIs may face criminal prosecution for laundering the proceeds of criminal activities when they hold the proceeds of tax crimes; i.e. a holding such proceeds is a serious offence under the Corruption, Drug Trafficking and Other Serious Crimes Act (CDSA) (please refer to schedule 2 of the Act for a list of serious offences). In this respect, FIs may be sentenced to fines up to SGD 1m, confiscation of the benefits and a withdrawal of their licenses. Individuals may be sentenced to fines of SGD 500,000 and up to 7 years of imprisonment.
On 28 March 2013, the MAS issued a response to the feedback received during the October 2012 public consultation exercise
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