Singapore yesterday signed two international agreements which will make it easier for the Republic to exchange tax information with other jurisdictions.
The agreements are part of ongoing global efforts to combat tax evasion and money laundering as well as improve tax transparency.
Called multilateral competent authority agreements (MCAAs), they lay out an international framework to facilitate the automatic exchange of tax information hence avoiding the need for countries to conclude multiple bilateral agreements.
The first agreement covers the automatic exchange of financial account information under the Common Reporting Standard (CRS).
This is an international standard endorsed by the Organisation for Economic Cooperation and Development, which sets out the financial information to be exchanged between jurisdictions, the types of accounts and taxpayers covered, and due diligence procedures which financial institutions need to follow.
The second agreement covers the exchange of country-by-country reports, a form of tax reporting that requires multinationals to set out in a report key data for all the countries they operate in, such as revenue, taxes paid and staff numbers. The move is in line with an OECD effort to end "base erosion and profit shifting", a practice by which firms avoid taxes by engineering lower profits in places where taxes are high and correspondingly report higher profits in low-tax jurisdictions.
Both agreements were signed in the Netherlands by Mrs Chia-Tern Huey Min, deputy commissioner for international, investigation and indirect taxes at the Inland Revenue Authority of Singapore.
A statement from the Ministry of Finance (MOF) said the signing of both MCAAs "reaffirms Singapore's commitment to the international standards on tax cooperation".
Even after signing the agreements, Singapore - as well as other signatories - will ultimately still have control over which jurisdictions it will automatically exchange information with.
The country with which Singapore exchanges information has to have safeguards to ensure the confidentiality of the information exchanged and prevent its unauthorised use and there has to be full reciprocity with the partner in terms of information exchanged.
In the case of CRS, Singapore will also want to ensure that there is a level playing field among all major financial centres.
Finance Minister Heng Swee Keat said: "Signing both MCAAs will allow Singapore to implement the international standards with our bilateral automatic exchange of information partners in an effective and efficient way."