Reader writes

Tuesday, 01 May 2012

Clarification by Monetary Authority of Singapore

I refer to the article ‘As simple as black and white?’ (STEP Journal, Vol20 Iss1, pages 38–39). While the article correctly observes that individuals who are intent on engaging in unscrupulous behaviour can be brought to justice under Singapore’s tax regime, I would like to clarify details about the exchange of tax information and mutual legal assistance regimes in Singapore to update STEP Journal readers.

The article suggests that Singapore applies the ‘judicial process’ to all tax information requests, which is incorrect. In Singapore, the judicial process is applicable only where the request relates to protected information such as a bank customer’s information. Furthermore, approval by the Organisation for Economic Cooperation and Development (OECD) was never needed for Singapore to amend her treaties for such a purpose, as alluded to.

Under the ‘judicial process’, it is the Singapore Courts, not the Monetary Authority of Singapore, that have the power to lift banking confidentiality for Singapore to assist in bona fide requests. This is intended to ensure a fair and independent assessment of the validity of requests, and not to frustrate or delay information exchange as suggested by the article. In this regard, Singapore’s exchange of information (EOI) regime is consistent with the internationally agreed standard for the EOI found in article 26 of the OECD Model Tax Convention on Income and on Capital. Singapore permits the exchange of tax information for purposes ranging from tax administration to enforcement of domestic tax laws of treaty partners.

Contrary to what the article states, since April 2006, a bilateral treaty is no longer a prerequisite for Singapore to provide mutual legal assistance to any country which is prepared to reciprocate such assistance. Many countries have obtained assistance from Singapore on this basis.

The successful development of Singapore’s financial sector has been consistently underpinned by high standards of financial regulation and supervision. Singapore’s banking and financial system is open and transparent, and the rules rigorously enforced. As an international financial centre, Singapore is committed to being a responsible jurisdiction in the area of international cooperation, which includes offering assistance on bona fide requests for tax-related information.

Also, as of 29 February 2012, Singapore has 16 tax treaties in place with G20 members (not 15).

Comment

Singapore-based Dr Angelo Venardos TEP, who is Executive Director and Founder of the Heritage Trust Group and a STEP Worldwide Council member, said: ‘The Monetary Authority of Singapore has stated that it wanted Singapore to be ahead of the regulatory curve. The response to this article shows it is working to promote Singapore as a well-regulated, high-quality financial centre and expel the European/UK perception that the so-called “flight of money” to Asia went to Singapore because it was a soft target compared to other jurisdictions.’

Response to new restrictions on domestic workers in the UK

About the author: Ceris Gardner TEP, Partner, Maurice Turnor Gardner, London

The new immigration rules on domestic worker visas are potentially disastrous for many clients who are key investors in the UK. Most investors into the UK do not enter the UK on a visitor visa; rather they enter on a tier 1 (investor) visa for a minimum of three years and often much longer. However, under the new rules they would be prohibited from bringing any of their overseas domestic workers to the UK unless they entered the UK on a temporary basis under a visitor visa. As such, I believe the new rules announced in February are contradictory to and could potentially scupper the efforts of the newly improved tier 1 (investor) visas, which aim to attract investment into the UK.

Individuals and their family members, who highly value the relationship of trust and confidence that they have built up with their staff, would be less likely to come and invest in the UK if they could not bring their employees.

The changes are also likely to be most unwelcome for investor-visa holders who are already in the UK (under a tier 1 (investor) visa) and employing domestic workers in the UK, as the changes announced recently suggest that domestic workers who are currently living and working in the UK will no longer be able to renew their visas.

Surely the status quo of one-year visas renewed each year is the best way of achieving the government’s goal of attracting investment into the UK while ensuring that accompanying domestic staff remain in the UK for that purpose only? Investor-visa holders in the UK would have less objection to the settlement option being removed, but they are concerned that these recent changes mean that a domestic worker can only be brought to the UK by an individual who has entered the UK on a visitor visa for six months and that individuals who are currently in the UK on domestic worker visas will no longer be able to renew their visas after 6 April 2012.

This goes directly against the government’s intention to encourage wealthy investors to invest in UK gilts and/or UK companies under the investor-visa rules.

What do you think? Email your opinion to editor@step.org

Author block
Right
Angelina Fernandez

Angelina Fernandez is the Director (Communications) at the Monetary Authority of Singapore.

Topic
Taxation
Section
STEP Journal
Country
Singapore

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