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Singapore – Legislation And Regulation: All Foreign Tax Crimes Made Predicate Offences As From 1 September 2014.

20 November, 2014

 

Legal News & Analysis – Asia Pacific – Singapore – Tax

 

The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Act came partially into force on 1 September 2014.Accordingly, with effect from that date, all foreign tax crimes committed with wilful intent became a predicate offence. This is regardless of whether there is a corresponding equivalent tax offence in Singapore.


The term “foreign serious tax offence” was added to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”). This comprises any foreign tax evasion offence, so long as the offence has been criminalised in the foreign jurisdiction and it is committed wilfully with intent to evade tax. The forms of evasion specified in the defined term are as follows:

 

  • Omitting from, or understating or overstating in, a return made for the purposes of that tax any information which should be included in the return;
  • Making any false statement or entry in any return, claim or application made, or any document or information required to be given, for the purposes of that tax;
  • Giving any false answer, whether verbally or in writing, to any question or request for information asked or made for the purposes of that tax;
  • Failing to inform the authority responsible for the collection of that tax, in the required manner, of any incorrect information appearing in any assessment made by the authority, when required to do so;
  • Preparing or maintaining, or authorising the preparation or maintenance, of any false books of account or other records, or falsifying or authorising the falsification of any books of account or records; and
  • Making use of any fraud, art or contrivance, or authorising the use of such fraud, art or contrivance.

Financial institutions may therefore have to re-consider their KYC account opening and AML surveillance parameters.
This removal of the requirement of dual criminality has also been applied to the Mutual Assistance in Criminal Matters Act. The Mutual Assistance in Criminal Matters (Amendment) Act also came into force on 1 September 2014. The amendments provide that for foreign tax evasion offences, the dual criminality requirement will not be required for:

 

  • requests requiring a court order to produce information or items; and
  • requests that involve search and seizure or the forfeiture of assets, where there is an Avoidance of Double Taxation Agreement, Exchange of Information arrangement, or international tax compliance agreement between Singapore and the requesting country.

The financial institutions required to comply with the record keeping requirements set out in the CDSA have been expanded to include the following, among others:

 

  • A trustee for an authorised collective investment scheme;
  • A trustee-manager of a registered business trust; and
  • A licensed trust company.

Finally, the amendment to the CDSA also established a cash transaction reporting regime in a new Part VIB. This new Part VIB came into force on 15 October 2014.

 

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For further information, please contact:

 

Elaine Chan, Partner, WongPartnership

elaine.chan@wongpartnership.com

 

Joy Tan, Partner, WongPartnership
joy.tan@wongpartnership.com

 

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