IRAS has recently entered into agreements with Australian and United Kingdom tax authorities on the automatic exchange of financial account information (“AEOI”) based on the Common Reporting Standard (“CRS”). The CRS is an internationally agreed standard for AEOI, endorsed by OECD and Global Forum for Transparency and Exchange of Information for Tax Purposes (“GF”). More than 100 jurisdictions have endorsed the CRS and will commence AEOI in either 2017 or 2018.
Under this agreements, IRAS will now be able to collect information from banks and financial institutions relating to their foreign customers while their overseas counterparts will automatically exchange financial account information of accounts in the their countries held by Singapore tax residents.
This regular exchange of financial account information between jurisdictions for tax purposes will make it easier for tax authorities in detecting and deterring tax evasion by taxpayers through the use of offshore bank accounts. Therefore, taxpayers should make sure their tax affairs are in order and seek professional help so they can be certain as to their obligations under the tax laws.