UBS hands over client's Singapore bank records to US taxman

WASHINGTON • UBS Group has ended a legal fight with the Internal Revenue Service (IRS), agreeing to hand over records on an American client's account in Singapore as the United States authorities seek to move beyond Switzerland in their fight against offshore tax evasion.

The case involves Mr Hsiaw Ching-Ye, a US citizen living in China who had a UBS account from 2001 to 2011. On Feb 23, the IRS filed a petition asking a federal judge in Miami to force UBS, the largest Swiss bank, to produce account records on Mr Hsiaw, Bloomberg reported.

The IRS said it needed the records to determine Mr Hsiaw's income tax liabilities from 2006 to 2011. After reaching an agreement, the bank handed over records on May 31 and June 10, the Department of Justice said on Tuesday in a court filing dismissing the petition.

"The Department of Justice and the IRS are committed to making sure that offshore tax evasion is detected and dealt with appropriately," said Acting Assistant Attorney- General Caroline D. Ciraolo of the Department of Justice's Tax Division in a statement on Wednesday.

The US has focused largely on Switzerland since 2008 as it fights offshore tax evasion. More than 80 Swiss banks, including UBS and Credit Suisse Group, have agreed to pay a total of US$5 billion (S$6.7 billion) or so in penalties and fines.

"UBS confirms that it complied with the summons based on client consent in accordance with Singapore law," said UBS spokesman Marsha Askins.

IRS agents served a summons on UBS in 2013 for records of Mr Hsiaw's UBS account from 2001 to 2011. Mr Hsiaw transferred his account to Singapore in 2002, according to the Department of Justice. The bank said it could not produce the information as Singapore's bank secrecy laws prevent disclosure without permission from Mr Hsiaw, which he had not provided, according to a court filing.

"Singapore's laws and regulations do not prohibit sharing of information for investigations into possible tax offences," said a spokesman for the Monetary Authority of Singapore. "Banking information could be disclosed through client's consent or via Singapore mutual legal assistance."

A version of this article appeared in the print edition of The Straits Times on June 24, 2016, with the headline 'UBS hands over client's S'pore bank records to US taxman'. Print Edition | Subscribe