Singapore-based FIs must establish tax residency status of account holders: IRAS
SINGAPORE: Under the Common Reporting Standard (CRS) which has been in effect since Jan 1, Singapore-based Financial Institutions (FIs) are now required to establish the tax residency status of all their account holders, the Inland Revenue Authority of Singapore (IRAS) said on Friday (Jan 6).
The CRS is an internationally agreed standard for the automatic exchange of information (AEOI) on financial accounts between jurisdictions for tax purposes with the objective of enhancing tax transparency to detect and deter tax evasion through the use of offshore bank accounts.
These depository institutions, such as banks, specified insurance companies, investment entities and custodial institutions must also report to IRAS the financial account information of account holders who are tax residents of jurisdictions with which Singapore has a Competent Authority Agreement (CAA) to exchange the information.
As of Jan 6, Singapore has signed CAAs with Australia, United Kingdom, Japan, Republic of Korea, South Africa, Norway, Italy, Canada, Finland, the Netherlands, Iceland, Malta, Ireland, Latvia and New Zealand.
In turn, all account holders in Singapore should provide information and supporting documents to FIs to establish their tax residency status, IRAS said. If the account holders do not respond to their FIs’ requests to confirm their tax residency status, the FIs will have to treat the account holders as tax residents in the respective foreign jurisdictions, based on the information available to the FIs.
Account holders should also inform their FIs of any change in circumstances, such as long-term job postings to a foreign jurisdiction, which may affect their tax residency status.
The account holders are also reminded to ensure that all submissions to FIs are accurate.
For accounts opened before Jan 1, IRAS said FIs may contact the account holders to confirm their tax residency status if the FIs have information that indicates they could be foreign tax residents.
For new accounts opened on or after Jan 1, FIs should use a self-certification form, to be filled in by account holders, to indicate their tax residency information.
More than 100 jurisdictions, including major financial centres such as Dubai, Hong Kong and Switzerland, have committed to implement AEOI based on the CRS and will commence AEOI under the CRS either in 2017or 2018, IRAS said. Singapore has made an international commitment to commence AEOI under the CRS in 2018.
