The Court of Appeal has today affirmed Singapore’s powers and duty in responding to data-sharing requests from its foreign counterparts. This power was sealed since the judgment was passed on this case: AXY and others v Comptroller of Income Tax (2018)
If you’re a foreigner and you’re trying to hide your money in Singapore, don’t even try. It is unlikely that you can get away with evading taxes since your country will ask for bank data from Singapore!
This puts Singapore’s tax authority, IRAS, in good stead to align itself with the internationally agreed Standard for EOI treaty moving forward.
Here’s what happened:
The tax authority of Korea, the National Tax Service (NTS), was investigating five Korean individuals, as well as companies owned by some of them. The NTS suspected that these individuals had bank accounts in Singapore that were being used to conceal their income in order to evade taxes.
Korea then reached out to Singapore for help in getting the bank data and documents of these five individuals to help with its investigations. This request is called an EOI or Exchange of Information request.
After much consideration, Singapore’s tax authority (IRAS) issued production notices against three Singapore banks to get them to share the data. This was when a few of the five Korean individuals applied to Singapore’s High Court to stop IRAS’ order.
The High Court rejected the five Korean individuals’ application in September 2017, and today, the Court of Appeal affirmed the High Court’s decision.
The decisions of both the High Court and the Court of Appeal have put beyond doubt the Comptroller’s powers and duties at law in responding to an EOI request from a foreign treaty partner.
What a historic moment for Singapore!
Did you know?
Singapore took up the EOI Standard in 2009. This shows that we are committed in combating cross-border tax offences. Since 2013, global forums have affirmed that Singapore’s EOI regime is in line with the EOI Standard, both in terms of legal framework and implementation.
The decisions of both the High Court and the Court of Appeal in this case have made clear the legal position on EOI administration and also endorses Singapore’s decision to assist in the request from the South Korean tax authority based on its assessment that the request was consistent with the EOI Standard.
Click here for Supreme Court’s case summary
Click here for IRAS’ press statement