Jurisdiction - Singapore
Reports and Analysis
Singapore – Tax Information Exchange, The New Legal Landscape.
31 July, 2013

Legal News & Analysis – Asia Pacific – Singapore – Tax


By 1st January 2014, the powers of the Comptroller of Income Tax (Comptroller) at the Inland Revenue Authority of Singapore (IRAS) are likely to be considerably enhanced to more efficiently extract confidential information and documents from persons in Singapore and provide them to foreign tax authorities (FTAs). This goes beyond bank and trust information held by entities supervised by the Monetary Authority of Singapore (MAS). 


On 18 July 2013, the Ministry of Finance (MOF) launched a public consultation, for responses within 2 weeks by 31 July 2013, on proposed amendments to the Income Tax Act to change substantially the exchange of information (EOI) regime introduced in 2010. 

The three key changes under the proposed amendments are: 

1) Extending the ability of the Comptroller to provide the information and documents to FTAs who do not have the latest rights to the information or documents under their bilateral tax agreements (DTAs) with Singapore or whose countries have no DTA at all with Singapore; 

2) Removing the statutory protection in the Income Tax Act that requires the Comptroller to justify his request before the High Court and to obtain a court order before he can obtain secret information and documents from a bank or trust company. In such legal proceedings, the Comptroller initiates a court action to implement the request for information from the relevant FTA; 


3) Concluding and implementing an agreement between Singapore and the United States (with whom there is no comprehensive DTA) to require Singapore financial institutions to comply with demands of US tax compliance legislation, namely the Foreign Account Tax Compliance Act (FATCA). 

The consultation paper states that the basic safeguards to taxpayers will not be undermined. However, taking away the scrutiny of the High Court, one of the 2 levels of checks under the Income Tax Act upon a request for information from a FTA, may not necessarily assure taxpayers that their rights will continue to be safeguarded. IRAS itself is the other check, besides the High Court. This suggests that after removing the requirement for the Comptroller/IRAS to get a High Court order, IRAS would be the only check, unless the taxpayer’s right of appeal to an independent third party does continue to exist meaningfully. 

In describing the removal of the statutory protection of a High Court order, the summary table in the consultation exercise states this streamlines IRAS’ EOI administration. It is not clear where or how taxpayers will continue to have the right of appeal, nor to whom. At the same time, enforcement powers (including prosecution for non-compliance with notices issued by the Comptroller for information requested by an FTA) are enhanced under the proposed 

These proposed changes do not prevent any action taken by the Comptroller from being challenged in, or reviewed by, a court of law, where necessary. The Comptroller, as a public officer, is still required to exercise his powers within the law in carrying out his public duties



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