Singaporean financial institutions such as insurers, banks, and investment entities are now required to establish the tax residency status of all their account holders, according to the Inland Revenue Authority of Singapore (IRAS).
The new guidelines are part of the Common Reporting Standard (CRS), an internationally accepted standard on the automatic exchange of information on financial accounts. The standard aims to increase tax transparency and combat tax evasion, which commonly involves offshore bank accounts. The CRS came in effect on January 1.
The financial institutions are also required to report to the IRAS the financial account information of clients who are taxpayers of countries that have a Competent Authority Agreement (CAA) with Singapore.
At present, Singapore has signed CAAs with the following countries: Australia, the UK, Japan, South Korea, South Africa, Norway, Italy, Canada, Finland, the Netherlands, Iceland, Malta, Ireland, Latvia, and New Zealand.
Account holders are requested to inform their financial institution of any change in circumstances, such as a long-term assignment to work overseas, which could have an impact on their tax residency status.
All new accounts opened after January 1 will have a self-certification form for account holders to provide their tax residency information. Each account holder will be reminded to ensure that all information submitted must be accurate.
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