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Singapore continues to be a special destination

Updated time: 20 Jul, 2019, 12:11 (UTC+08:00)

Singapore was named the best place in the world for expats to move to for the fourth year in a row in HSBC’s 2018 Expat Explorer survey. More than a quarter of Singapore expats may have originally been sent by their employer (27%), but almost half (47%) have stayed on for the great quality of life it offers them and their family.

They’re certainly drawn to this global financial hub with its strong and stable

economy. Almost half of all expats in Singapore moved to progress their careers (45%). And though more than a quarter simply wanted a challenge, many more (38%) wanted to improve their earnings.

Singapore’s government is committed to ensuring that things stay that way. In 2018 it activated 61 Automatic Exchange of Financial Account Information (AEOI) relationships to endorse its commitment to international standards on transparency and tax cooperation under the OECD’s Common Reporting Standard (CRS). As a result, Singapore will share financial account data generally dating back as far as 1st January 2017, with these countries on an annual basis, with covered institutions required to provide CRS information for these jurisdictions from 31st May 2018.

Under the CRS, the financial information to be reported with respect to reportable accounts includes interest, dividends, account balance, income from certain insurance products, sales proceeds from financial assets, and other income generated with respect to assets held in the account or payments made with respect to the account.

Reportable accounts include accounts held by individuals and entities, which include trusts and foundations, and the CRS includes a requirement that financial institutions ‘look through’ passive entities to report on the relevant controlling persons.

With its business-friendly environment, world-class infrastructure and highly competitive tax regime, Singapore is the best place for any investor to enhance their business and their presence in Asia.

To maintain this competitive environment while staying in compliance with the OECD’s Base Erosion and Proft Shifting (BEPS) project, the government brought the Economic Expansion Incentives (Amendment) Act 2018 into force in May.

These provide for the exclusion of income from intellectual property rights from the scope of tax relief under the Pioneer Service Companies Incentive and the Development and Expansion Incentive schemes. The change was required by Singapore’s introduction, as of 1st July 2018, of the new Intellectual Property Development Incentive, which is in line with the ‘modifed nexus’ approach under Action 5 of the BEPS initiative.

In December 2018, Singapore also ratifed the Multilateral Convention to

Implement Tax Treaty Related Measures to Prevent BEPS. This entered into force for Singapore on 1st April 2019 and is an essential step in protecting Singapore’s treaty network against BEPS activities.

In October 2018, Singapore’s exchange of information upon request (EOIR) regime was rated as compliant with international tax transparency standards after an OECD Global Forum peer review. The Global Forum noted that Singapore had appropriate legislation in place requiring the availability of all relevant information and that Singapore was valued as an important and reliable partner.

During the year, Singapore signed new double tax treaties with Tunisia, Brazil, Kenya and Gabon. It also signed a Tax Information Exchange Agreement (TIEA) and a reciprocal Foreign Account Tax Compliance Act Model 1 Intergovernmental Agreement with the US in November.

The TIEA will permit Singapore and the US to exchange information for tax

purposes. The reciprocal IGA provides for the automatic exchange of information with respect to financial accounts under the US Foreign Account Tax Compliance Act (FATCA). The new reciprocal IGA will supersede the existing non-reciprocal IGA when it enters into force.

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