Professional Documents
Culture Documents
SINGAPORE
Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Singapore 2011
PHASE 1
June 2011
(reflecting the legal and regulatory framework
as at March 2011)
This work is published on the responsibility of the Secretary-General of the OECD.
The opinions expressed and arguments employed herein do not necessarily reflect
the official views of the OECD or of the governments of its member countries or
those of the Global Forum on Transparency and Exchange of Information for Tax
Purposes.
Series: Global Forum on Transparency and Exchange of Information for Tax Purposes: Peer Reviews
ISSN 2219-4681 (print)
ISSN 2219-469X (online)
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TABLE OF CONTENTS – 3
Table of Contents
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Information and methodology used for the peer review of Singapore. . . . . . . . . . 9
Overview of Singapore. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
A.2.Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
B. Access to information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
B.1. Competent Authority’s ability to obtain and provide information . . . . . . . . 56
B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 63
C. Exchanging information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
C.1. Exchange of information mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
C.2. Exchange-of-information mechanisms with all relevant partners . . . . . . . . 72
C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . . 75
C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . . 76
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4 – TABLE OF CONTENTS
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ABOUT THE GLOBAL FORUM – 5
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SINGAPORE © OECD 2011
EXECUTIVE SUMMARY – 7
Executive summary
1. This report summarises the legal and regulatory framework for trans-
parency and exchange of information in Singapore. The international stand-
ard, which is set out in the Global Forum’s Terms of Reference to Monitor
and Review Progress Towards Transparency and Exchange of Information, is
concerned with the availability of relevant information within a jurisdiction,
the competent authority’s ability to gain timely access to that information,
and in turn, whether that information can be effectively exchanged with its
exchange of information (EOI) partners.
2. Singapore’s economy is stable, competitive and open, combining
free-market with economic planning. Singapore enjoys one of the highest per
capita gross domestic products (GDP) in the world. It has become a major
financial hub in the region, housing over 700 financial institutions which
offer a diversified range of services, in particular banking, insurance and
wealth management services.
3. In March 2009 Singapore committed to the internationally agreed stand-
ard for international exchange of information (EOI) in tax matters. In October
2009, the Singapore Parliament passed the Income Tax (Amendment) (Exchange
of Information) Bill to lift the domestic tax interest requirement and allow the
exchange of bank and trust information in respect of agreements that contain
wording akin to Articles 26(4) and (5) of the OECD Model Tax Convention.1
The Bill came into operation in February 2010. Singapore has since then actively
sought to update and extend its network of double taxation conventions: between
March 2009 and March 2011, it signed 26 agreements or protocols providing for
EOI to the standard. Singaporean authorities have informed the Global Forum
that they are also in contact with about 30 other jurisdictions, including OECD
members, G20 members and Singapore’s major trading partners, to conclude
agreements to the internationally agreed standard on exchange of information.
4. Singapore’s laws provide for extensive registration and licensing
requirements which, coupled with broad tax filing and reporting obligations,
1. OECD, Model Tax Convention on Income and on Capital (last revision: July
2010).
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8 – EXECUTIVE SUMMARY
should guarantee that ownership and identity information is available for all
types of companies, partnerships and trusts. Accounting records, including
underlying documentation, are also available and are required to be kept
for at least 5 years. The effectiveness of these obligations is supported by a
comprehensive system of sanctions. The same holds true with regards to bank
information, the availability of which is prescribed under the commercial,
banking and anti-money laundering legislation.
5. Singapore’s tax authorities have broad access powers, but, as a gen-
eral rule, they can be exercised to gather information provided that there is
a domestic tax interest. However, with the legislative amendment in 2009,
Singapore’s tax authorities can gather and share information regardless of
domestic tax interest, for the purposes of a request made under a double tax
convention which is a “prescribed arrangement”. “Prescribed arrangements”
are essentially double taxation conventions (DTCs) with an EOI provision
containing provisions akin to Articles 26(4) and (5) of the OECD Model Tax
Convention. For the same purposes, Singapore’s tax authorities can obtain
an Order by the High Court to access protected bank and trust information.
When making the Order the High Court must be satisfied that the disclosure
of the protected information is not contrary to “public interest” and that it is
not information subject to “legal privilege”. Procedures to safeguard taxpay-
ers’ rights are envisaged as part of international standard, insofar as they do
not unduly delay the effective exchange of information. A practical assess-
ment of whether this procedure imposes an impediment to the exchange of
information will be made in the Phase 2 Peer Review of Singapore.
6. Twenty-six double taxation conventions signed after March 2009
include an EOI provision containing the post-2005 language of Article 26 of
the OECD Model Tax Convention. Pursuant to Singaporean law, only these
agreements qualify as “prescribed arrangements” that override the domestic
tax interest requirement that applies in relation to other EOI agreements.
There are 14 “prescribed arrangements” currently in force. Among the
“prescribed arrangements” currently in force, only two are with Singapore’s
main trading partners. Singaporean law does not currently allow for the
establishment of Taxation Information Exchange Agreements (TIEAs). It is
recommended that Singapore continue updating and expanding its network
of agreements for international exchange of information in tax matters, and
ensure that all its relevant EOI partners have access to full exchange of infor-
mation, including bank information and information on trusts.
7. Singapore’s response to the determinations, factors and recommen-
dations in this report, as well as the application of the legal framework to
the practices of its competent authority, will be considered in detail in the
Phase 2 Peer Review of Singapore, which is scheduled for the second half of
2012.
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INTRODUCTION – 9
Introduction
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10 – INTRODUCTION
Overview of Singapore
11. Singapore is an island country off the southern tip of the Malay
Peninsula, in Southeast Asia. With a territory of approximately 700 square
kilometres and a population of about 5 million.2 Singapore is one of the
most densely populated countries in the world, with the three largest ethnic
groups being Chinese, Malay and Indian. The presence of foreign workers
and non-residents is also significant. Singapore is a multi-religious and a
multi-linguistic country, with no official religion and four official languages
(English, Mandarin, Malay and Tamil).
12. While there were pre-existing small settlements, Singapore was
founded as a British trading colony in 1819 and grew into an important port
in the region. It was granted self-rule in 1959 and merged with Malaysia in
1963. It separated two years later and became fully independent in 1965. Since
then, Singapore has enjoyed high and stable economic growth. Nowadays,
Singapore is a major global financial centre, playing a key role in international
trade and finance. It has developed an economic model where pro-business
and export-oriented economic policies coexist with state-directed investments
in strategic government-owned companies.3 Its 2009 Gross Domestic Product
(GDP) was USD 182.23 billion (EUR 132.31 billion).4 The port of Singapore
is one of the five busiest ports in the world, and its merchant marine is one of
the largest. According to Transparency International’s Corruption Perception
Index, Singapore is the 3rd least corrupt country in the world.5
13. The economy, which depends heavily on exports and refining
imported goods, is based upon three pillars: manufacturing (notably elec-
tronic and pharmaceutical), logistics and communication, financial and busi-
ness services. One of the world’s largest foreign exchange trading centres,
Singapore is a major destination point for international equity and direct
foreign investment. The insurance and asset management sectors are also
significant. Overall, the financial sector in Singapore accounts for about 12%
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INTRODUCTION – 11
of GDP, after manufacturing (21%), wholesale and retail trade (18%) and
business services (13%). The Singaporean currency is the Singaporean dollar
(SGD, with a floating exchange rate of EUR 1 = SGD 1.76 on 1 March 2011).
14. In the past ten years, Singapore’s financial sector has increased con-
siderably, consolidating its position as a leading wealth management centre
and international financial hub. This is also due to the reforms enacted in
1998-1999 which have: (i) opened the financial industry to greater foreign
competition; (ii) kept regulatory and supervisory practices in line with
international best practices on prudential regulation and supervision and
disclosure-based regulation; (iii) developed deep and liquid fixed-income and
equity markets; (iv) promoted the asset management industry; and (v) gradu-
ally liberalised the restrictions on the international use of the Singapore dollar.
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12 – INTRODUCTION
also has general supervisory and revisionary jurisdiction over all subordinate
courts. The Court of Appeal is solely an appellate court. It hears only appeals
from the High Court. Decisions of the Court of Appeal are binding on lower
courts.
17. There is a single national law, and no divisions between federal and
sub-national powers. The Constitution is the supreme law of the Republic of
Singapore: if a law enacted after its commencement is inconsistent with the
Constitution, then this law is void (Art.4). Singaporean legislation can be divided
into statutes and subsidiary legislation. Statutes are written laws enacted by the
Singapore Parliament. Subsidiary legislation, also known as “delegated legisla-
tion” or “subordinate legislation”, is written law made by ministers or other
administrative agencies such as government departments and statutory boards
under the authority of a statute (the “parent Act”) or other lawful authority,
and not directly by Parliament. Section 2(1) of the Interpretation Act defines
“subsidiary legislation” as meaning any order in council, proclamation, rule,
regulation, order, notification, by-law or other instrument made under any Act,
Ordinance or other lawful authority and having legislative effect. Subsidiary
legislation must, unless otherwise expressly provided in any statute, be pub-
lished in the Government Gazette and, unless expressly provided in the sub-
sidiary legislation itself, takes effect and comes into operation on the date of its
publication.
18. Double taxation conventions (DTCs) are ratified upon issuance of an
order by the Minister for Finance declaring that they should have effect (s.49
Income Tax Act, “ITA”). The Minister can declare that an arrangement should
have effect only if such arrangement has been made with the government of
any country outside Singapore with a view to affording relief from double
taxation in relation to tax under the Income Tax Act and any tax of a similar
character imposed by the laws of that country. The DTC is ratified the day on
which it is published in the Singapore Government Gazette as an attachment
to the ministerial order. There is no requirement to seek approval of other par-
ties or of Parliament. Once an agreement has been declared by the Minister,
the arrangements in it have effect notwithstanding anything in any written
law. As double taxation agreements are ratified through subsidiary legisla-
tion issued under the ITA, provisions in the ITA may prevail over provisions
contained in a ratified agreement. Only declared agreements that have been
“prescribed” by the Minister allow for exchange of information for tax pur-
poses in accordance with the internationally agreed standard for EOI (ss.105C
and 105D ITA). There are no legal provisions for the conclusion of a TIEA.
19. A complete list of all the relevant legislation and regulations is set out
in Annex 3.6
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INTRODUCTION – 13
Tax system
20. Article 143 of the Constitution of the Republic of Singapore provides
that [n]o tax or rate shall be levied by, or for the purposes of, Singapore
except by or under the authority of law. The major taxes are the income
tax, the goods and services tax, the stamp duty and the property tax. The
Government of Singapore also imposes other minor taxes, including a casino
tax, betting and sweepstake duties. Customs duties are only imposed on
alcoholic beverages and preparations, tobacco products, petroleum products
and motor vehicles. The tax administration agency is the Inland Revenue
Authority of Singapore (IRAS).
21. Income tax is charged on a territorial basis and upon remittance;
i.e. on income accruing in or derived from Singapore, or received in
Singapore from outside Singapore (s.10 ITA). The meaning of the words
“accruing in or derived from” is not defined in the Income Tax Act, but it is
interpreted by reference to the common law. Pursuant to case law currently
developed by common law jurisdictions, two approaches are possible: the
operations test (aiming at identifying the place where the business opera-
tions is carried out) and the originating cause test (locating the transactions
that gave rise to the earning of the income). In determining whether income
accrues in or is derived from Singapore, both approaches will be considered
unless the facts show clearly that the income is sourced outside of Singapore.
22. Rates are progressive for individuals (up to 20%) and flat for cor-
porate bodies (17%). Branch profits are subject to tax as if the branch was a
resident company, at a rate of 17%.
23. Corporate profits, including profits derived by business trusts,
are subject to a one-tier corporate tax system, under which all dividends
paid by resident companies are exempt in the hands of shareholders at all
levels. Profits remitted to the branch’s foreign head office are also not taxed.
Pursuant to s.2(1) of the ITA, a company is resident in Singapore if the man-
agement and control of its business is exercised in Singapore. Partnerships,
including limited liability partnerships, are not separate taxable persons,
and each partner is liable to tax on his share of income from the partnership.
Trusts are not legal entities for tax purposes. Income of a trust is assessable
in the hands of the trustee. Income derived by a registered business trust is
subject to the same tax treatment as income derived by a company (s.36B
ITA). Singapore does not impose any capital gains tax.
24. All foreign income received by individuals in Singapore is exempt
from tax, unless received through a partnership. Foreign dividends, branch
profits and service fees received through a partnership or by a resident com-
pany are exempted if tax has been paid in the foreign jurisdiction, provided
that the highest corporate tax rate is at least 15%. Companies engaged in
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14 – INTRODUCTION
substantial business activities overseas which are unable to qualify for tax
exemption for specified foreign income may also be granted exemption if they
remit the foreign income and the IRAS is satisfied that the qualifying condi-
tions (e.g. the Singaporean recipient is not a shell company) are met. There is
no withholding tax on dividends. A specific exemption applies to income of
foreign trusts managed by a trustee resident in Singapore (s.13G ITA).
25. Singapore also has tax incentives in place which may grant full
or partial exemption, reduced tax rates, investment allowances or special
deductions for certain economic activities, including research activities and
foreign direct investments. Tax incentives are generally granted for a limited
period to companies conducting substantive business activities and only on
the income that such companies derive from qualifying activities.
26. Singapore has three free trade zones, which are essentially designated
areas in Singapore where the payment of duties and taxes are suspended
when the goods arrived in Singapore. No person may enter or reside within a
free trade zone without the permission of its supervisory authority (s.15 Free
Trade Zones Act). Singapore law does not provide for special rules concern-
ing the obligations of companies operating in the free trade zones.
7. Data obtained from the annual Economic Survey of Singapore, 2009, Ministry
of Trade and Industry; available at https://app.mti.gov.sg/data/article/21265/doc/
FullReport__AES2009.pdf.
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INTRODUCTION – 15
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16 – INTRODUCTION
from practice, a fine or a censure. Practice Directions issued under the Legal
Profession Act are similarly enforceable if the breach amounts to misconduct.
33. Public accountants, accountants and auditors also perform functions
as business service providers. There are almost 1 000 accountants working in
accounting firms, accounting corporations or accounting limited liability part-
nerships providing public accountancy services (i.e. the audit and reporting
on financial statements and other acts that are required by written law to be
done by a public accountant). Accountants may register with the Accounting
and Corporate Regulatory Authority (ACRA), thus becoming “public account-
ants”. Only public accountants, accounting corporations, accounting firms
and accounting limited liability partnerships may provide public accountancy
services, i.e. the audit and reporting on financial statements and the perfor-
mance of such other acts that are required by any written law to be done by a
public accountant (s.56 Accountants Act). While only a person registered as a
public accountant under the Accountants Act may call and hold him or herself
to be a “public accountant”, the use of the title of “accountant” is otherwise not
regulated by statute.
34. The ACRA has supervisory powers on public accountants and may
make rules prescribing, inter alia, the standards, methods, procedures and
other requirements to be applied by public accountants when providing public
accountancy services and the code of professional conduct and ethics of public
accountants, accounting corporations, accounting firms and accounting part-
nerships. Public accountants are monitored by ACRA under the Accountants
Act and any breaches of professional standards may be dealt with and sanc-
tioned under Part V and VI of the Accountants Act. The Institute of Certified
Public Accountants of Singapore also issues guidance to its members, includ-
ing AML/CFT guidance. Such guidance is not legally binding but compliance
with the guidance relating to the provision of auditing services is monitored
under the Practice Monitoring Programme of the Accountants Act.8 Where
a public accountant fails the practice review under the Practice Monitoring
Programme, the Public Accountants Oversight Committee may impose sanc-
tions which include suspension or cancellation or refusal to renew the public
accountant’s registration (s.38 Accountants Act).
35. Accountants that are not registered as public accountants are not
subject to specific binding anti-money laundering legislation.
36. Under s.3 of the Trust Companies Act, any person carrying on any
trust business or holding himself out as carrying on any trust business in
Singapore must be licensed as a trust company by the MAS. Licensing exemp-
tions are available in limited and specific circumstances, but exempt service
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INTRODUCTION – 17
Recent developments
9. www.oecd.org/dataoecd/50/0/43606256.pdf.
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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 19
A. Availability of Information
Overview
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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 21
Types of companies
48. The Companies Act (CA) is the central piece of legislation governing
the establishment and management of corporations in Singapore. Depending
on the nature of the liability of their members,11 companies can be divided into
companies limited by shares, companies limited by guarantee and unlimited
companies (s.17(2)(a) to (c) CA). An “unlimited company” is a company formed
on the principle of having no limit placed on the liability of its members (s.4 CA).
49. A company with share capital (whether limited or unlimited) may be
incorporated as a private company if its memorandum or articles contain:
a restriction on the right to transfer shares (s.18(1)(a)); and
a limitation on the number of members to no more than fifty (s.18(1)(b)).
50. A private company is prohibited from issuing any invitation to the
public to subscribe to its shares or debentures, or to deposit money with the
company. A company other than a private company is a public company. As
a company limited by guarantee does not have a share capital, a company
limited by guarantee is by definition a public company.
51. There is no minimum capital requirement for a private company,
although a minimum of one share must be subscribed. Individuals may also
decide to carry out business in the form of a sole proprietorship.
52. A private company is an exempt private company where:
no beneficial interest is held directly or indirectly in the company’s
shares by any corporation; and there are not more than 20 members; or
the company’s shares are wholly owned by the Government, and
the Minister in the national interest declares by notification in the
Gazette the company to be an exempt private company (s.4(1) CA).
10. Terms of Reference to Monitor and Review Progress Towards Transparency and
Exchange of Information.
11. As a general rule, the Companies Act employs the term “member” with reference
both to persons having an interest in companies limited by guarantee and persons
having an interest in a company limited by shares. In addition, “members” of
companies limited by shares are also referred to as “shareholders”.
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Singaporean companies
55. Subject to all prescribed requirements being met, a company can
be incorporated in Singapore upon submission of a memorandum to the
Accounting and Corporate Regulatory Authority (ACRA). ACRA, a statutory
board under the Ministry of Finance, is both the central registry for all busi-
ness entities in Singapore including corporations, limited liability partner-
ships and sole proprietorship as well as the registry for the public accounting
profession.12
56. The memorandum to be submitted to ACRA upon incorporation
must include information on the name of the company, the location of its reg-
istered office, the liability of the members and the company’s capital struc-
ture (s.22(1) CA). The Memorandum will state the names of the subscribers
(members or shareholders) and, for companies with share capital, the number
of shares subscribed by them at the time of incorporation. The Memorandum
may also include a description of the objects of the company (s.23(1A)).
57. Subsequent to incorporation, where a company limited by shares
makes any allotment of its shares, the company must within 14 days of the
allotment lodge with the Register a return of allotment of shares stating,
inter alia, the full name, identification, nationality and address of, and the
number and class of shares held by each of its members. If the company has
more than 50 members as a result of the allotment, this information will be
12. All registration and filing requirements with ACRA can be accomplished elec-
tronically, via the “Bizfile” (www.bizfile.gov.sg), the Authority’s online registra-
tion, notification, filing and information retrieval system. The public can access
Bizfile to do an online search on registered entities, purchase information and
file all business transactions at anytime. BizFile also serves as a one-stop shop
for business by allowing new businesses to reserve their web domain name, reg-
ister for GST and activate their customs account at the point of registration.
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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 25
Foreign companies
67. Foreign companies that establish a place of business in Singapore or
carry on business in Singapore must register under the Companies Act (s.368
CA). The concept of foreign company includes a company, corporation, soci-
ety, association or other body incorporated outside Singapore and an unincor-
porated society, association or other body which under the law of its place of
origin may sue or be sued, or hold property in the name of the secretary or
other officer of the body or association duly appointed for that purpose and
which does not have its head office or principal place of business in Singapore.
68. Upon registration in Singapore, a “foreign company” must lodge with
the Registrar various information, including a certified copy of the certificate
of its incorporation or registration in its place of incorporation or origin, a certi-
fied copy of its charter, statute or memorandum and articles or other instrument
constituting or defining its constitution, a list of its directors and a memorandum
of appointment or power of attorney stating the names and addresses of two
or more natural persons resident in Singapore authorised to accept service of
process on its behalf (s.368 CA). The law does not expressly require the mainte-
nance of the owners/shareholders’ particulars, except where the shareholder is a
resident in Singapore. In such a case, the foreign company must keep a branch
register of members who are residents in Singapore (s.379 CA).
69. After registration, foreign companies continue to be subject to report-
ing requirements including notification to ACRA of any changes in the memo-
randum or articles lodged with the Registrar, changes in the directors of the
foreign company, changes in the registered office of the company in Singapore
etc. (s.372 CA).
70. Regardless of its place of incorporation, as long as a company is reg-
istered with ACRA or is deriving income from Singapore, it is required to file
annual tax returns with the Inland Revenue Authority of Singapore, providing
the same information required for Singaporean companies, including infor-
mation concerning substantial changes in the company’s shareholders and
audited or unaudited financial accounts, which normally contain full infor-
mation on the company’s shareholders (s.62 ITA). Singaporean authorities
have clarified that reporting obligations under s.62 also apply to registered
foreign companies with unremitted foreign income, including companies that
only earn non-taxable interest income. Exception to the obligation to file a
tax return is only made by the Comptroller if the company:
is dormant and has submitted its tax returns, accounts and tax com-
putations up to the date of cessation of business, and
does not own any investment (e.g. share, properties, fixed deposit) or
if the company owns investment, it did not derive any income from
the investment.
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COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 27
who apply to have the shares registered therein (s.379 CA). No information on
shareholders who are not resident of Singapore needs to be kept in Singapore.
77. Companies also need to keep identity and ownership information
for tax purposes. While no specific information needs to be furnished at the
point of filing the tax return, companies are required to make such a statutory
declaration regarding substantial changes in their shareholdings (see par. 64
above). The company must be able to substantiate its claim when requested
by the IRAS and therefore full information on the shareholders needs to be
available to the IRAS.
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Conclusion
85. In essence, the Companies Act and the Income Tax Act require filing
of information on the ownership and identity of companies with the ACRA
or the IRAS. When coupled with the obligations under the Companies Act for
the companies to maintain registers of members, and as appropriate indexes
of members and registers of substantial shareholders, companies in Singapore
– including exempt private companies – are required to maintain full legal
13. See MAS Notices 626, 1014, 824, SFA04-N02, FAA-N06, 314, TCA-N03, 3001,
SFA13-N01, PSOA-N02.
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Types of partnerships
87. Singapore law provides for three types of partnerships:
general partnerships;
limited liability partnerships (LLP); and
limited partnerships (LP).
88. General partnerships are regulated under the Partnerships Act, where
a partnership is defined as the relation which subsists between persons car-
rying on a business in common with a view of profit. A general partnership
is not regarded as a separate legal entity, and the liability of each partner is
unlimited. There are no capital requirements. The minimum number of part-
ners is 2 and the maximum is 20.
89. Pursuant to the 2005 Limited Liability Partnerships Act, an LLP is
regarded as a body corporate and has a legal personality separate from its
partners. For tax purposes, however, an LLP is treated as a transparent entity.
There are no capital requirements. The minimum number of partners is two
with no maximum limit. An LLP gives its owners the flexibility of operating
as a partner while giving them limited liability, combining the benefits of a
partnership with those of private limited companies.
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14. Pursuant to the First Schedule of the Business Registration Act, businesses excluded
from the registration requirements under s. 4 BRA are the following: Any business
of a licensed hawker, whether itinerant or otherwise, who sells or exposes for sale
any food, drink, goods, wares or merchandise of any kind, or who offers for hire
his skill in handicraft or craftsmanship; any business of a craftsman who (a) exer-
cises his craft on his own domestic premises; (b) does not display the products of
his craftsmanship for sale in public; and (c) does not employ any person other than
members of his immediate family for the purpose of his business; any business of
(a) a taxi driver; (b) a trishaw rider; (c) a sampan man plying his sampan for hire;
or (d) a farmer, a fish pond keeper or a prawn pond keeper who (i) does not employ
any person other than members of his immediate family; (ii) does not own the land
on which his farm or pond stands; and (iii) does not charge members of the public
any fee for admission.
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(s.4 BRA). In the case of a business carried on by a firm (which includes gen-
eral partnerships),15 the information that must be lodged with the Registrar
includes: the name, identification (if any), nationality and the usual place of
residence of every partner and, where a partner is a corporation, the cor-
porate name, registration number and registered office of the corporation
(s.6(1) BRA). These rules also apply to sole proprietorships.
95. For limited liability partnerships, registration requirements are pro-
vided for by the Limited Liability Partnerships Act. Under s.15(1), the infor-
mation that must be lodged with the Registrar for the purposes of registration
includes:
the name of the proposed limited liability partnership;
the general nature of the proposed business of the limited liability
partnership;
the proposed registered office of the limited liability partnership;
the name, identification, nationality and the usual place of residence
of every person who is to be a partner and, where any of these per-
sons is a body corporate, the corporate name, place of incorporation
or registration, registration number and registered office of the body
corporate to which all notices and communications may be addressed;
the name, identification, nationality and the usual place of residence
of every person who is to be a manager of the partnership and, where
any of these persons is a body corporate, the corporate name, place
of incorporation or registration, registration number and registered
office of the body corporate to which all notices and communications
may be addressed; and
such other information as may be prescribed by the Minister.
96. In addition to the information required for limited liability partner-
ships, limited partnerships are required to lodge with the Registrar infor-
mation on the general and limited partners, name and address of any local
manager and the term, if any, for which the proposed limited partnership is
entered into, as well as the date of its commencement (s.11(1) LP Act).
97. Where a general partner of a limited partnership carries on a busi-
ness wholly or mainly as nominee or trustee of or for another person, he
must submit additional information to the Registrar (s.7 BRA and s.11(3) LP
15. A “firm” is defined in section 2(1) of the Business Registration Act as an unin-
corporated body of 2 or more individuals, or one or more individuals and one or
more corporations, or 2 or more corporations, who have entered into partner-
ship with one another with a view to carrying on business for profit.
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Act). For nominees and trustees, such additional information must include
the name, nationality and usual place of residence of every person on whose
behalf the business is carried on and, if such person is a corporation, the
name of the corporation, its registered office and the general nature of its
business. If the beneficiaries are a class of children or other persons, he must
furnish a description of the class.
98. All foreign partnerships with a place of business in Singapore are
required to register with ACRA and submit the same information requested
for domestic partnerships (s.6 BRA). Agents of foreign partnerships must
also submit additional information to the Registrar including the business
name and address of the foreign partnership for whom they work and the
general nature of the business in Singapore. Agents working for three or more
foreign partnerships, need only state the fact that the business is so carried
on, specifying the partnerships they act for and the countries in which those
partnerships carry on business (s.7 BRA and s.11(3) LP Act).
99. For all limited and limited liability partnerships, where there is any
change in the registered particulars, the nature and date of the change must
be reported to ACRA within 14 days after the change.
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103. The tax authorities can also obtain from ACRA the following infor-
mation concerning partnerships:
name of partnership and its business address;
business registration number and date of registration;
nature and status of business;
name, identification, nationality and address of partners;
name and identification number of precedent partners; and
date of entry/withdrawal of partners.
104. For limited partnerships, the IRAS can also obtain additional infor-
mation from ACRA indicating, where relevant, on whose behalf the general
partners act.
105. In addition to these general requirements, limited liability partner-
ships and limited partnerships which have incurred business losses are
required to complete and submit to the IRAS a capital contribution form
declaring contributed capital of the partners as at the end of the account-
ing period. The capital contribution form has to be submitted in the year of
assessment in which the loss is incurred, and all subsequent years of assess-
ment, regardless of whether the partnership makes a profit or loss. If the
capital contribution is in the form of real property, shares and securities or
intellectual property to a value exceeding SGD 0.5 million (EUR 285 000),
the precedent partner is also required to submit an independent valuation
report in respect of the item.
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the full name, identification, nationality and the usual place of residence of
every limited partner of the limited partnership (where any limited partner
of the limited partnership is a corporation, the corporate name, place of
incorporation or registration, registration number and registered office of
the corporation to which all notices and communications may be addressed)
(s.12(3) Limited Partnerships Regulations 2009).
Ownership information held by service providers
108. The MAS’s AML/CFT Notices16 (MAS Notices) for financial institu-
tions, trust companies, money changers, remittance companies and approved
trustees require these entities to conduct CDD on all customers, including
partnerships that seek to establish business relations. Upon the establishment
of business relationships, these entities are required to obtain, verify and
record information on the customer transacting on behalf of the partnership;
on all managers of thepartnership; and all beneficial owners of thepartnership.
Beneficial owners is defined as being the natural persons who ultimately own
or control the customer or the person on whose behalf a transaction is being
conducted, and including the persons who exercise ultimate effective control
over a body corporate or unincorporated. These obliged entities are required
to periodically review the adequacy of customer identification information
obtained in respect of customers and beneficial owners and ensure the infor-
mation is kept up to date.
109. Advocates and solicitors are required to carry out CDD under the
Legal Profession (Professional Conduct) (Amendment) Rules 2007. Public
accountants providing auditing services are also required to carry out CDD
under guidance issued by the Institute of Certified Public Accountants of
Singapore, in particular, under Revised Statement of Auditing Practice (SAP
19) and auditing standards in relation to the consideration of laws and regu-
lations and fraud in an audit. Accountants who are not registered as “public
accountants” are not subject to specific binding CDD obligations (see above
paras.33-34).
Conclusion
110. Overall, comprehensive, up-to-date ownership and identity infor-
mation is available to the ACRA or the IRAS in respect of all partnerships
operating in Singapore. In addition to this, financial institutions and some
other service providers are required under anti-money laundering legislation
to obtain information on the ownership chain for all of their customers.
16. See MAS Notices 626, 1014, 824, SFA04-N02, FAA-N06, 314, TCA-N03, 3001,
SFA13-N01, PSOA-N02.
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Types of trusts
111. Trusts are recognised, and can be created under Singaporean law.
In addition to the common law principles, there are specific statutes and
statutory provisions on the law on trusts in Singapore, notably the Trust
Companies Act (TCA), the Trustees Act and the Business Trusts Act (BTA).
As a general rule, for any trust business conducted in Singapore, the same
legal and regulatory framework applies regardless of whether the settlors
are resident or non-resident, or whether assets settled in the trust are located
within or outside Singapore.
112. A trustee of a Singaporean trust may be a natural or corporate entity,
and does not have to be a resident of Singapore. The types of trusts created
under the laws of Singapore may be categorised as:
private trusts;
business trusts; and
unit trusts (also known as collective investment schemes).
113. A private trust, otherwise known as an express trust, is a trust cre-
ated under the common law when the provisions of the trust manifest the
certainty of intention, certainty of the subject matter, and the certainty of
objects. The private trust also has to be properly constituted. Evidence in
writing is required for a declaration of trust in respect of any immovable
property or a disposition of an equitable interest.
114. Business trusts (defined under s.2 BTA) are hybrid structures with ele-
ments of both companies and trusts. A business trust differs from a company
as it is not a legal entity, and is created by a trust deed under which a single
trustee-manager has legal ownership of the assets of the business enterprise,
and manages the business for the benefit of the beneficiaries of the trust (the
investors). Like a company, however, a business trust operates and runs a
business enterprise, and investors can invest in the underlying business by
subscribing units in the business trust, similar to investing in shares in a com-
pany. Further, these units can be listed and traded on a securities exchange.
115. As defined under the Business Trusts Act, units in a business trust
must be exclusively or primarily non-redeemable. The trustee-manager of a
registered business trust must be a company incorporated in Singapore, and
must not be an exempt private company (s.4 BTA).
116. A trust is considered to be a business trust also if it belongs to a
class or description of trust that is declared by MAS, by notice published in
the Gazette, to be a business trust. Certain types of trusts – such as trusts
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operated otherwise than by way of business, trusts arising out of a life policy
or trusts made by or on behalf of a corporation solely for the benefit of its
directors are not regarded as business trusts for the purposes of the Business
Trusts Act.
117. Unit trusts are essentially a means for investment in a portfolio
of securities and are therefore regulated as collective investment schemes
(CIS) under the Securities and Finance Act. The trustee of an authorised
unit trust (i.e. one which is constituted in Singapore and offered to retail or
sophisticated investors in Singapore) must be approved by MAS (s.289 SFA).
An approved trustee must be a public company incorporated in Singapore.
It must also meet certain minimum financial and operational requirements.
Moreover, the trustee company and each of its officers must be fit and proper
persons. Such approved trustees will be subject to inspection by MAS.
118. A trust can also be a charity, in which case, it must satisfy all the
requirements set out under the Charities Act. Singapore law also recognises
waqfs, under the Administration of Muslim Law Act (AMLA). A waqf is a
permanent dedication of movable or immovable properties by a Muslim for
any purpose recognised by the Muslim law as pious, religious or charitable.
All waqfs are registered in Majlis Ugama Islam Singapura (MUIS), the
Islamic Religious Council of Singapore, thereby allowing MUIS to have a
complete database of all waqf properties, revenue, expenses and disburse-
ment information (s.64(3) AMLA).
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120. Successful application for a trust company license requires the applicant
to have, inter alia, a physical presence in Singapore and management expertise
and financial soundness (s.5 Trust Companies Act). Trust company licences are
granted only to companies incorporated under the Companies Act, or foreign
companies registered under the Companies Act. As part of licensing, applicants
are required to provide general information on the types of trusts they intend to
administer or provide services to, as well as the nature of services that they are
extending.17 MAS Notice TCA-N03 requires licensed trusts companies to collect
detailed information on the specific trusts being administered; such information
is obtainable by the competent authorities upon request.
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Registration of trusts
126. Singapore’s trust regulatory framework does not provide for a central
registry for express trusts, but targets the major avenues of trust formation
and trust administration in Singapore through the application of regulations
and guidelines on trust intermediaries such as trust companies, advocates,
solicitors and public accountants. All these professional intermediaries fall
under the definition of regulated trust businesses. Trusts established by trus-
tees who are not deemed to carry out a trust business are typically simple
arrangements and constitute a very narrow segment of the trust industry in
Singapore. Even so, financial institutions are obliged to conduct CDD, includ-
ing obtaining beneficial ownership information, on their customers including
customers related to private trusts.
127. Business trusts that raise funds from the retail public are required
to be registered under the Business Trusts Act for the purpose of investor
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Singapore’s income tax. Exempt foreign trusts include unit trusts that are
beneficially owned wholly by such individuals or foreign companies.18
134. Finally, it is conceivable that a trust could be created which has no
connection with Singapore other than that the settlor chooses that the trust
will be governed by the laws of Singapore. In that event there may be no
information about the trust available in Singapore. In these situations trust
information would rest in the jurisdiction where the trustee is located as the
relevant records would be situated there.
18. Section 13G of the Income Tax Act exempts from income tax in Singapore, income
prescribed under the Income Tax (Exemption of Income of Foreign Trusts) Regula-
tions 1994. The regulations exempt from tax the specified income from designated
investments derived by a foreign trust or eligible holding company, established for
the purposes of the foreign trust, which is administered by a Singapore trustee com-
pany. The trustee company must submit an annual declaration to the Comptroller, in
such form as the Comptroller or the Monetary Authority of Singapore specifies, that
the foreign trust or the eligible holding company (as the case may be) has, or both
the foreign trust and the eligible holding company have, met the conditions in the
Regulations.
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(including the beneficial owner), as well as the nature and purpose of the
trust. Public accountants are required to develop a thorough understand-
ing, through appropriate due diligence, of the true beneficial parties to the
transactions, the source and intended use of funds and the appropriateness
and reasonableness of the business activity and pattern of transactions in the
context of the business, under SAP 19 which is monitored under the Practice
Monitoring Programme under the Accountants Act (see above paras.33-34).
Regulated financial institutions performing exempted business trusts services
are subject to the CDD requirements imposed under their respective MAS
Notices. These requirements oblige them to identify and verify information
of trust-related parties including settlor, trustees, beneficiaries and beneficial
owners.
142. As explained in paragraphs 33-34 above, when the service provider
of a foreign exempt trust is an accountant not registered as a “public account-
ant” he will not be subject to specific binding CDD obligations under the
Accountants Act. He will nonetheless be required to obtain a business trust
licence and hence comply with CDD and licensing requirements under the
Trust Companies Act, as the exemption from trust business licensing require-
ments only covers “public accountants” (s.3 and Second Schedule TCA).
143. In addition, when trusts undertake financial transactions using any
financial institution operating in Singapore, the financial institution is required
under the MAS Notices to conduct CDD to identify, verify and record informa-
tion on the trust-related parties, including the settlors, trustees, beneficiaries
and the beneficial owners of the trust.
Conclusion
144. In essence, identity and ownership information is generally avail-
able in respect of trusts administered by trust companies and trust company
service providers. Information may not necessarily be available for trusts
administered by individuals not acting by way of business. Singapore’s
trust regulatory framework targets the major avenues of trust formation and
administration by regulating trust intermediaries that provide such trust ser-
vices by way of business. In Singapore’s view the number of trustees who are
not acting by way of business is a narrow category, and such structures are
likely to be simple (examples of such structures include trust arrangements
between relatives). This issue will be followed up in the Phase 2 review.
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Phase 1 Determination
The element is in place.
Factors underlying Recommendations
recommendations
Not all nominees are required to have An obligation should be established
information available on the persons for all nominees to maintain relevant
for whom they act. ownership and identity information
where they act as the legal owner on
behalf of any other person.
A.2.Accounting records
Jurisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements.
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Commercial law
162. The Companies Act requires every company to keep (s.199(1)):
such accounting and other records as will sufficiently explain the
transactions and financial position of the company and enable
true and fair profit and loss accounts and balance-sheets and
any documents required to be attached thereto to be prepared
from time to time and shall cause those records to be kept in such
manner as to enable them to be conveniently and properly audited.
163. This means companies in Singapore are required to maintain
accounting records which: (i) correctly explain all transactions; (ii) enable the
financial position of the company to be determined with reasonable accuracy
at any time; and (iii) allow financial statements to be prepared. In addition,
all companies are required to have their financial statements laid before the
company at the annual general meeting (s.201(1) to (3C) CA). The directors
of the company are responsible for ensuring:
that the financial statements comply with the Accounting Standards
(s. 201(1) to (3A) CA); and
unless the company is exempt from the audit requirements, that the
financial statements are audited (s. 201(4) and (4A) and 205B and
205C).
164. Exempt private companies are required to lay their balance sheets
and profit and loss statements before the company at their annual general
meetings but, if solvent, they are exempt from filing their balance sheet or
profit and loss statement with their annual return submitted to the ACRA
under the Companies Act (s.197 CA). Notwithstanding, they are still required
under the Income Tax Act to file accounts with IRAS (s.67 ITA). In the event
that such companies have annual turnover that does not exceed SGD 5 mil-
lion (EUR 2.85 million), they can file unaudited accounts but the unaudited
accounts (including notes to the accounts) must be prepared in compliance
with the Companies Act, and must be accompanied by the Directors’ report
and Statement by Directors.
165. A foreign company carrying on business in Singapore is required to
lodge with ACRA a copy of its balance sheet within two months of its annual
general meeting and a duly audited statement showing: assets used in and lia-
bilities arising out of its operations in Singapore as at the date on which its bal-
ance sheet was made up; a duly audited profit and loss account. The Registrar
may ask for further details every time he is of the opinion that the balance
sheet and the other documents prepared according to the law applicable to the
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Tax law
172. The Income Tax Act requires every person carrying on or exercis-
ing any trade, business or profession to keep books of account also requires
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transactions by the trustee entered into on behalf of the private trust; and
(ii) financial position of the private trust.
178. Trustees of foreign trusts are also subject to s.67of the ITA and, there-
fore, are obliged to keep and retain in safe custody sufficient records for a
period of five years from the year of assessment to which any income relates
to enable his income and allowable deductions under this Act to be readily
ascertained by the Comptroller or any officer authorised in that behalf by
the Comptroller. Singaporean authorities reported that s.67 applies also to all
trustees of foreign trusts carrying on a trade in Singapore, including trustees
of foreign trusts that are exempt from income taxes under s.13G of the ITA.
179. Moreover, in case of exempt foreign trusts, Regulation 3 of the
Income Tax (Exemption of Income for Foreign Trust) Regulations states that
tax exemptions may only be granted for foreign trusts and eligible holding
companies administered by a trustee company in Singapore. Under s.43J(2) of
the ITA, the term “trustee company” refers to a company that is either: (i) a
licensed trust company within the meaning of the Trust Companies Act (Cap.
336); or (ii) that is exempted under that Act from holding a trust business
license within the meaning of that Act. Licensed trust companies that admin-
ister trusts, including foreign trusts, are required, under the MAS AML/
CFT Notice for trust companies (MAS TCA-N03), to maintain documents
relating to the provision of trust business services. Such documents include
account files and business correspondence, and must be sufficient to explain
the trusts’ transactions. Foreign express trusts may also be administered by
entities that are exempted from trust business licensing – however, these enti-
ties are subject to their relevant MAS AML/CFT Notices or sector-specific
regulations/guidelines which set forth obligations on the trustee to maintain
accounting information sufficient to explain and reconstruct the transactional
relationship between the trust-relevant parties.
Conclusion
180. As a consequence, general tax obligations complement commer-
cial law obligations and, taken together, result in all relevant entities being
required to maintain accounting records should (i) correctly explain all
transactions, (ii) enable the financial position of the entity or arrangement to
be determined with reasonable accuracy at any time and (iii) allow financial
statements to be prepared.
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that accounting records reflect details of all sums of money received and
expended, all sales and purchases and other transactions, and the assets and
liabilities of the company.
182. More specific requirements to keep records and underlying docu-
mentation can be found in the tax law, under s.67 of the ITA (see above,
para.172). Such requirements apply to all relevant entities and arrangements
– including companies, partnerships, foreign entities and trusts – and are
further clarified by guidelines issued by the IRAS on the mandatory records
that businesses must keep in order to comply with Singapore tax laws.19
For example, the Record Keeping Guide for GST-Registered Businesses (as
revised on 11 November 2010) and non-GST Registered Businesses (31 May
2010) explains that, for income tax purposes, businesses must retain records
for, and be able to, explain all their transactions, namely:
all transactions relating to income records;
all transactions relating to business expenses; and
all purchase transactions.
183. Businesses must also keep accounting records and schedules to sum-
marise their records in a systematic order. These include stock lists, sales
listings, purchase listings, general ledgers, statement and accounts. Finally,
businesses must keep the source documents (such as receipt, tax invoices,
vouchers, and other relevant documents) that explain how these accounting
records were derived.
19. www.iras.gov.sg/irasHome/page04.aspx?id=10286#Record_Keeping_Requirements.
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Phase 1 Determination
The element is in place.
20. Islamic banking in Singapore is regulated and supervised under the same
banking regulatory framework as conventional banking. MAS’ Guidelines on
Application of Banking Regulations to Islamic Banking sets out the application
of a single regulatory framework for both conventional and Islamic banking. The
same licensing, CDD and document-retention levied on conventional FIs equally
apply to Islamic banks.
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190. The Notice further specifies that banks must retain their records:
for a period of at least five years following the termination of busi-
ness relations for customer identification information, and other
documents relating to the establishment of business relations, as well
as account files and business correspondence; and
for a period of at least five years following the completion of the
transaction for records relating to a transaction, including any infor-
mation needed to explain and reconstruct the transaction.
191. Equally, s.37 of the Corruption, Drug Trafficking and other Serious
Crimes Act (CDSA) requires all financial institutions to retain a copy of all
financial transaction documents for a minimum retention period of five years
after the day on which the transaction takes place. For the purposes of the
CDSA, financial institution means a licensed bank, merchant bank, finance
company, the holder of a capital markets services license, a licensed financial
adviser, an insurance company, and an insurance intermediary. It excludes
money-changers and remitters. The term financial transaction document
includes, but is not limited to, documents which relate to:
the opening or closing by a person of an account with the institution;
the operation by a person of an account with the institution;
the opening or use by a person of a deposit box held by the institu-
tion;
the telegraphic or electronic transfer of funds by the institution on
behalf of a person to another person;
the transmission of funds between Singapore and a foreign country
or between foreign countries on behalf of a person;
an application by a person for a loan from the institution (where a
loan is made to the person pursuant to the application); or
records of customer identification.
Phase 1 Determination
The element is in place.
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B. Access to information
Overview
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Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information).
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notice is not less than 30 days from the date of service (s.65 ITA). The same
procedure may be used to require any person to provide a statement contain-
ing particulars of all his bank accounts, loans, assets and all facts bearing
upon his liability to income tax to which he is, or has been, liable (s.65A ITA).
200. In addition, the Comptroller or any officer authorised by him shall at
all times have full and free access to all buildings, places, documents, com-
puters or information for any of the purposes of the ITA. The Comptroller
may also require any person to give orally or in writing, as may be required,
all such information concerning his or any other person’s income or assets
or liabilities for any of the purposes of the ITA (s.65B ITA). The Comptroller
is therefore enabled to ask for and obtain information from any persons who
are in possession and control of the information. This includes, within the
limits specified in the following paragraphs, EOI under a DTC ratified by the
Minister for Finance pursuant to s.49 ITA.
201. Section 65B ITA, however, does not in itself enable the Comptroller
to override any existing secrecy provisions: section 65B(2) of the ITA
explicitly states that “no person shall by virtue of this section be obliged to
disclose any particulars as to which he is under any statutory obligation to
observe secrecy”. Information covered by statutory obligations to observe
secrecy include both bank and trust information (s.47(1) Banking Act and
s.49(1) Trust Companies Act: see paragraphs 217-218 below).
202. However, with the legislative amendment in 2009, IRAS has powers
to obtain protected bank and trust information regarding any person’s income
for purposes of a request for information made under a prescribed double
taxation convention (DTC). To exchange information protected by bank or
trust secrecy under a prescribed DTC, the IRAS must obtain an order by the
High Court (s.105J ITA; see also below, paragraph 218 ff.).
203. A prescribed DTC is one containing an exchange of informa-
tion article which meets the internationally agreed standards (s.105D and
s.105E(2) ITA). The Minister for Finance may by Order declare a DTC con-
taining an exchange of information article which meets the internationally
agreed EOI Standard as a prescribed arrangement for the purposes of the
ITA. The Minister is also authorised to revoke such an Order with a subse-
quent Order (s.105C ITA).
204. Orders declaring an agreement to be a prescribed agreement have
been issued for the ratification of 14 of Singapore’s DTCs. As a result, the
IRAS is able to collect all information requested, regardless of bank or trust
secrecy, when answering requests under those DTCs. Singapore reports to be
ready to ratify 12 other signed DTCs containing EOI provisions to the stand-
ard. However, the remaining 42 of Singapore’s DTCs have not been yet been
updated to include EOI provisions inclusive of wording akin to paragraphs
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4 and 5 of the OECD Model Tax Convention. Thus, they cannot be declared
prescribed arrangements.
205. The Eigth schedule of the ITA describes the list of information (as
reproduced below) to be included in a request for information filed under a
“prescribed arrangement”. However, s.105D(2) of the ITA provides that the
Comptroller can waive any of these requirements. Information listed in the
Eight Schedule is the following:
the purpose of the request;
identity of the requesting (competent) authority;
the identity of the person in relation to whom the information is
requested; 21
a statement of the information requested including its nature, the rel-
evance of the information to the purpose of the request, and the form
in which the competent authority wishes to receive the information
from the Comptroller;
grounds for believing that the requested information is being held
by our competent authorities, or is in the possession or control of a
person in Singapore;
the name and address of any person believed to have possession or
control of the information requested for;
a statement that the request is in conformity with the law and
administrative practices of the requesting jurisdiction, and that that
competent authority is authorised to obtain this information under
the laws of its home jurisdiction, or within the normal course of its
administrative practice;
a statement that the country has pursued all available means to obtain
the information domestically, which includes requesting it directly
from the person involved;
the details of the period within which that country wishes the request
to be met; and
any other information that is required or that may assist in giving
effect to the request.
206. Singapore’s authorities have further confirmed that the Comptroller
requires the name and address, to the extent known, of “any of the persons
believed to have possession or control of the information requested for”.
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Therefore, the Comptroller will waive the requirement for the name and
address if they are not known.22 The practical implementation of these provi-
sions will be assessed in the context of the Phase 2 review of Singapore.
207. Finally, Part XXA of the ITA does not apply to TIEAs. As a result,
the legislation does not provide Singapore’s competent authority the power
under a TIEA to obtain and provide to requesting competent authorities rel-
evant information held by banks, other financial institutions, and any person
with a statutory secrecy obligation. So far, however, Singapore has not con-
cluded any TIEAs (see paragraph 263 below).
22. Singapore has already communicated this to all its treaty partners via the EOI
standard format published on the IRAS website (http://iras.gov.sg/irasHome/
uploadedFiles/Quick_Links/Tax_treaties/EOI(1).pdf ) which states that such infor-
mation should be provided “to the extent known”.
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any information that it has for its own purposes can be exchanged under all
agreements (see below para.249).
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production Orders are generally obtainable within a short time. This submis-
sion, however, may only be verified during the course of the Phase 2 Review.
222. Public interest is not otherwise defined in the ITA but Singapore’s
authorities indicate that it has the same meaning as the concept of public
policy (ordre public) endorsed by Art.26(3) of the Model Tax Convention.
This will be verified during the course of the Phase 2 Review.
223. In terms of legal professional privilege, a production Order issued
under s.105J of the ITA expressly overrides any obligations as to secrecy
or other restrictions upon the disclosure of information imposed by law or
otherwise”, but does “not confer any right to the production of, or access to,
information subject to legal privilege (s.105K(4)b ITA).
224. For the purposes of international exchange of information in tax mat-
ters, information subject to legal privilege is defined as (s.105I ITA):
communications between a professional legal adviser and his
client or any person representing his client made in connection
with the giving of legal advice to the client” and “communica-
tions between: (i) a professional legal adviser and his client or
any person representing his client; or (ii) a professional legal
adviser or his client or any such representative and any other
person, made in connection with, or in contemplation of, judicial
proceedings and for the purposes of such proceedings, when they
are in the possession of a person who is entitled to possession of
them, but excluding, in any case, any communications or item
held with the intention of furthering a criminal purpose.
225. The definition of information subject to legal privilege for exchange
of information purposes is similar to that found in the Mutual Assistance in
Criminal Matters Act, and they both mirror the confidentiality provisions in the
Legal Profession Act (s.81E and s.81T) and in the Evidence Act (s.128 and s.131).
226. This definition is in line with the standard in that it is strictly limited
to communication made in connection with the giving of legal advice to the
client or with judicial proceedings. However, the litigation privilege appears
to include not only information enclosed within a communication between
an attorney and client but also within a communication between a client and
another person who is not an attorney-at-law, which is beyond the exemption
for attorney-client privilege under the international standards. The definition
also appears to go beyond the standard in that information covered is not
limited to confidential communications between an attorney and his client.
This issue will be followed up in Phase 2 of the review process.
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Phase 1 Determination
The element is in place, but certain aspects of the legal implementation
of the element need improvement.
Factors underlying Recommendations
recommendations
The domestic tax interest requirement Singapore should ensure that its
provided for by Singapore’s domestic competent authority has the power
legislation – and applying also to the to obtain all relevant information with
exchange of protected bank and trust respect to all exchange of information
information – is currently overridden agreements (regardless of their form).
in respect of only 26 of the 69 signed
agreements. These 26 agreements
are DTCs.
227. The Terms of Reference provides that rights and safeguards should
not unduly prevent or delay effective exchange of information. For instance,
notification rules should permit exceptions from prior notification (e.g. in
cases in which the information request is of a very urgent nature or the
notification is likely to undermine the chance of success of the investigation
conducted by the requesting jurisdiction).
228. Singapore’s ITA provides for notifying the subject of the request in
limited circumstances, i.e. when the information requested is protected under
bank or trust confidentiality provisions. In such cases, the Comptroller must
notify the taxpayer and the bank or trust company of a valid request for infor-
mation (s.105E ITA).
229. Notice need not be served on any person, however, in a few instances,
including when the Comptroller (s.105E(4) ITA):
does not have any information on the person concerned;
is of the opinion that serving the notice is likely to prevent or unduly
delay the effective exchange of information under the prescribed
arrangement; or
is of the opinion that this is likely to prejudice any investigations into
any alleged breach of any law relating to tax of the jurisdiction with
whose government the prescribed arrangement in question was made.
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230. The existence of such exceptions ensures that the notification proce-
dure is consistent with the principle of respect for taxpayers’ rights under the
internationally agreed standard for exchange of information for tax purposes.
231. When a Court Order has been sought for the purposes of exchang-
ing protected information, both or either the persons against whom the
Order is made and the person in relation to whom information is sought
may, within 7 days from the date the Order is served on the person against
whom it is made, apply to the High Court to have the Order discharged or
varied (s.105J(4) ITA). An application for the discharge or variation of an
Order under s.105J of the ITA must be filed and served to the Comptroller
and any other person entitled to make such an application at least seven clear
days before the date fixed for the hearing of the application. All proceedings
are heard in camera. Its practical implementation will be followed up in the
Phase 2 Review.
Phase 1 Determination
The element is in place.
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C. Exchanging information
Overview
232. This section of the report examines whether Singapore has a network
of agreements that would allow it to achieve effective exchange of informa-
tion in practice.
233. Jurisdictions generally cannot exchange information for tax purposes
unless they have a legal basis or mechanism for doing so. The legal authority
to exchange information may be derived from bilateral or multilateral mecha-
nisms (e.g. double tax conventions, tax information exchange agreements,
the Joint Council of Europe/OECD Convention on Mutual Administrative
Assistance in Tax Matters) or arise from domestic law.
234. Since Singapore’s endorsement of the internationally agreed standard
for exchange of information for tax purposes in March 2009, Singapore has
actively sought to extend its network of EOI agreements, signing 26 agree-
ments or protocols incorporating the internationally agreed standard for
exchange of information, of which 14 are in force. Singapore reports to be
ready to ratify the remaining 12 “prescribed agreements” once the ratification
procedures of its treaty partners are completed.
235. Singapore’s policy is to negotiate DTCs rather than tax information
exchange agreements (TIEAs). It has recently amended its domestic legisla-
tion to allow it to fully exchange information in accordance with the terms of
a DTC containing wording akin to the current text of Article 26 of the OECD
Model Tax Convention. Singaporean law does not allow for TIEAs. In addi-
tion, one of the Global Forum members has indicated that it has approached
Singapore for negotiations on a TIEA without success as Singapore counter-
proposed that a DTC be established.
236. All agreements signed by Singapore after its endorsement of the
EOI standards contain the current version of Article 26 of the OECD Model
Tax Convention, including the requirement that a party cannot refuse to pro-
vide information solely because it is held by a bank. Singapore’s competent
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authority is only able to access bank and trust information with respect to
these exchange of information agreements, considered prescribed arrange-
ments (see section B.1) or where Singapore has a domestic interest.
237. The confidentiality of information exchanged with Singapore is
protected by obligations imposed under Singapore DTCs, as well as in its
domestic legislation. The discretions to exchange certain types of informa-
tion (such as business or professional secrets, or information the subject of
attorney-client privilege), which is allowed under the standard, are also incor-
porated in domestic law as well as in its DTCs.
238. Singaporean law requires an Order by the High Court to be issued
to allow information on bank and trust to be disclosed, provided that the
disclosure is justified by the circumstances of the case and it is not contrary
to public interest. Procedures to safeguard taxpayers’ rights are envisaged
as part of international standard, insofar as they do not unduly delay the
effective exchange of information. Singapore’s Court procedure will require
monitoring in the Phase 2 review to ensure that it does not prevent Singapore
from responding to a request for information by providing the information
requested or providing a status update within 90 days of receipt of the request.
239. Singapore has 14 agreements in force that meet the internationally
agreed tax standard, but these agreements do not cover all its main trading
partners. Singapore should endeavour to have full, effective exchange of
information with all its existing treaty partners. Moreover, given Singapore’s
recognised status of leading global financial centre, effective exchange of
information should be available for all jurisdictions from which investment
flows originate and to which the capital is destined to be invested.
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23. The current treaty with Switzerland does not have an exchange of information
article and is thus not considered in this analysis. A new DTC with Switzerland
containing the full text of Art. 26 of the OECD Model Tax Convention has been
signed on 24 February 2011, but it is not yet in force.
24. They are the agreements and protocols with: Albania (not in force), Australia (in
force), Austria (in force), Bahrain (not in force), Belgium (not in force), Brunei
(in force), China (in force), Denmark (in force), Estonia (not in force), Finland
(in force), France (in force), Georgia (in force), Ireland (not in force), Japan (in
force), South Korea (not in force), Malta (not in force), Mexico (not in force), The
Netherlands (in force), New Zealand (in force), Norway (in force), Panama (not
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in force), Qatar (not in force), Slovenia (in force), Saudi Arabia (not in force),
Switzerland (not in force) and the United Kingdom (in force).
25. The agreement with Libya, signed on 8 April 2009 and in force as of 23 December
2010, still contains the term “necessary” and therefore is not considered in this analysis.
26. The word “necessary” in paragraph 1 of Article 26 of the 2003 OECD Model Tax
Convention was replaced by the phrase “foreseeably relevant” in the 2005 ver-
sion. The commentary to Article 26 recognises that the terms allow for the same
scope of exchange.
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27. This includes the agreement with Libya, signed on 8 April 2009 and in force as
of 23 December 2010.
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258. Singapore has bilateral tax treaties in force providing for EOI with 62
jurisdictions (see Annex 2 for signing and entry into force dates). Fourteen of
the 26 agreements signed by Singapore after March 2009 and incorporating
the internationally agreed standard for exchange of information have been
ratified and are in force.
259. Singapore reports to be ready to ratify the remaining 12 upon receipt
of the notification by its treaty partners that the domestic procedures required
for the bringing into force of the DTC or protocol within their jurisdiction
have been completed. The ratification process in Singapore only involves a
publication in the Gazette by the Minister for Finance. There is no require-
ment to seek approval of other parties or of Parliament.
Phase 1 Determination
The element is in place, but certain aspects of the legal implementation
of the element need improvement.
Factors underlying Recommendations
recommendations
As a result of domestic law limitations Singapore should ensure that all its
with respect to access to information for agreements provide for exchange of
EOI purposes generally and access to information to the standard.
bank and trust information in particular,
only 26 of Singapore’s 69 signed agree-
ments provide for effective exchange of
information to the standard. Of these 26
agreements, 14 are in force.
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265. The Introduction to this report notes that the geographical position of
Singapore, at the middle of a major trading route, is central to its economic
activities, and that Singapore is a recognised leading global financial centre,
attracting capital from all over the world. Singapore’s main trading partners
(in order) are the US, Hong Kong, Malaysia, China, Indonesia, South Korea
and Japan. Singapore has exchange of information agreements with China
and Japan that meet the international standards. A protocol to bring the treaty
with South Korea up to the standard was signed in May 2010 and is currently
awaiting ratification.
266. Therefore, Singapore already has agreements in place with two major
regional partners and agreements with a number of other economically sig-
nificant jurisdictions. Singapore’s agreements with its immediate neighbours
(e.g. Malaysia, Indonesia and the Philippines) and some of its major trading
partners are yet to be updated to meet the international standards. Singapore’s
policy to date of only entering into DTCs may limit its ability to have EOI
arrangements with all relevant partners. Given Singapore’s importance as a
global finance centre, it is essential that its agreements with its relevant part-
ners meet the international standard.
Phase 1 Determination
The element is in place, but certain aspects of the legal implementation
of the element need improvement.
Factors underlying Recommendations
recommendations
Singapore cannot exchange Singapore should update and develop
information in accordance with the its EOI network to ensure it has
international standards under its agreements (regardless of their form)
EOI agreements with some relevant for exchange of information to the
partners. standard with all relevant partners.
C.3. Confidentiality
The jurisdictions’ mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received.
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can be disclosed and the purposes for which the information can be used. In
addition to the protections afforded by the confidentiality provisions of infor-
mation exchange instruments, countries with tax systems generally impose
strict confidentiality requirements on information collected for tax purposes.
Confidentiality rules should apply to all types of information exchanged,
including information provided in a request, information transmitted in
response to a request and any background documents to such requests.
268. All of the exchange of information articles in Singapore’s DTCs have
confidentiality provisions modeled on Article 26(2) of the OECD Model Tax
Convention.
269. The confidentiality requirement for information relating to a request
is also given effect in domestic legislation by s.6 and s.105J of the ITA.
Section 6 provides for a general obligation for every person having any offi-
cial duty or being employed in the administration of the act to regard and
deal with all documents, information, returns, assessment lists and copies
of such lists relating to the income or items of the income of any person, as
secret and confidential. Employees breaking the duty of confidentiality under
the ITA are guilty of an offence and are liable on conviction to a fine not
exceeding SGD 1 000 (EUR 570) and in default of payment to imprisonment
for a term not exceeding six months. Exceptions to the duty of confidentiality
only apply in specific and limited circumstances.
Phase 1 Determination
The element is in place.
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Phase 1 Determination
The element is in place.
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Phase 1 Determination
The assessment team is not in a position to evaluate whether this element
is in place, as it involves issues of practice that are dealt with in the
Phase 2 review.
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ANNEXES – 83
* This Annex presents the Jurisdiction’s response to the review report and shall
not be deemed to represent the Global Forum’s views.
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84 – ANNEXES
mechanism for information exchange via DTAs. We will work on the neces-
sary legislative amendments as part of our annual legislative exercise this
year. This will supplement Singapore’s efforts to sign and update DTAs with
our economic partners by enabling our tax authorities to enter into TIEAs
with other jurisdictions – thereby granting our tax authorities greater flex-
ibility to expand Singapore’s EOI network.
The Singapore delegation commends the work done by the Global Forum
in implementing the internationally agreed Standard. The Global Forum
peer reviews are important as they serve to ensure a level playing field. As
a responsible global player and treaty partner, Singapore will continue to
effectively implement the internationally agreed Standard.
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ANNEXES – 85
Type of EOI
Treaty partner arrangement Date signed Date in force
1. Albania DTC (Double Tax 23 Nov 2010 --
Convention)
2. Australia DTC Protocol 8 Sep 2009 22 Dec 2010
3. Austria DTC Protocol 15 Sep 2009 1 Jun 2010
4. Bahrain DTC 18 Feb 2004 31 Dec 2004
DTC Protocol 14 Oct 2009 --
5. Bangladesh DTC 19 Dec 1980 22 Dec 1981
6. Belgium DTC 6 Nov 2006 27 Nov 2008
DTC Protocol 16 Jul 2009 --
7. Brunei DTC Protocol 13 Nov 2009 29 Aug 2010
8. Bulgaria DTC 13 Dec 1996 26 Dec 1997
9. Canada DTC 6 Mar 1976 23 Sep 1977
10. China DTC Protocol 23 Jul 2010 22 Oct 2010
11. Chinese Taipei DTC 30 Dec 1981 14 May 1982
12. Cyprus 28 DTC 24 Nov 2000 8 Feb 2001
28. 1. Footnote by Turkey: The information in this document with reference to “Cyprus”
relates to the southern part of the Island. There is no single authority representing
both Turkish and Greek Cypriot people on the Island. Turkey recognizes the Turkish
Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is
found within the context of the United Nations, Turkey shall preserve its position
concerning the “Cyprus issue”.
2. Footnote by all the European Union Member States of the OECD and the European
Commission: The Republic of Cyprus is recognised by all members of the United
Nations with the exception of Turkey. The information in this document relates to the
area under the effective control of the Government of the Republic of Cyprus.”
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86 – ANNEXES
Type of EOI
Treaty partner arrangement Date signed Date in force
13. Czech Republic DTC 21 Nov 1997 21 Aug 1998
14. Denmark DTC Protocol 25 Aug 2009 8 Jan 2011
15. Egypt DTC 22 May 1996 27 Jan 2004
16. Estonia DTC 18 Sep 2006 27 Dec 2007
DTC Protocol 3 Feb 2011 --
17. Fiji DTC 20 Dec 2005 28 Nov 2006
18. Finland DTC Protocol 16 Nov 2009 30 Apr 2010
19. France DTC Protocol 13 Nov 2009 1 Jan 2011
20. Georgia DTC 17 Nov 2009 28 Jul 2010
21. Germany DTC 28 Jun 2004 12 Dec 2006
22. Hungary DTC 17 Apr 1997 18 Dec 1998
23. India DTC 24 Jan 1994 27 May 1994
24. Indonesia DTC 8 May 1990 25 Jan 1991
25. Ireland DTC 28 Oct 2010 --
26. Israel DTC 19 May 2005 6 Dec 2005
27. Italy DTC 29 Jan 1977 12 Jan 1979
28. Japan DTC Protocol 4 Feb 2010 14 Jul 2010
29. Kazakhstan DTC 19 Sep 2006 14 Aug 2007
30. South Korea DTC 6 Nov 1979 13 Feb 1981
DTC Protocol 24 May 2010 --
31. Kuwait DTC 21 Feb 2002 2 Jul 2003
32. Latvia DTC 6 Oct 1999 18 Feb 2000
33. Libya DTC 8 Apr 2009 23 Dec 2010
34. Lithuania DTC 18 Nov 2003 28 Jun 2004
35. Luxembourg DTC 6 Mar 1993 24 May 1996
36. Malaysia DTC 5 Oct 2004 13 Feb 2006
37. Malta DTC 21 Mar 2006 29 Feb 2008
DTC Protocol 20 Nov 2009 --
38. Mauritius DTC 19 Aug 1995 7 Jun 1996
39. Mexico DTC 9 Nov 1994 8 Sep 1995
DTC Protocol 29 Sep 2009 --
40. Mongolia DTC 10 Oct 2002 22 Oct 2004
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ANNEXES – 87
Type of EOI
Treaty partner arrangement Date signed Date in force
41. Morocco DTC 9 Jan 2007 --
42. Myanmar DTC 23 Feb 1999 30 Mar 2000
43. Netherlands DTC Protocol 25 Aug 2009 1 May 2010
44. New Zealand DTC 21 Aug 2009 12 Aug 2010
45. Norway DTC Protocol 18 Sep 2009 4 Apr 2010
46. Oman DTC 6 Oct 2003 7 Apr 2006
47. Pakistan DTC 13 Apr 1993 6 Aug 1993
48. Panama DTC 18 Oct 2010 --
49. Papua New Guinea DTC 19 Oct 1991 20 Nov 1992
50. Philippines DTC 1 Aug 1977 18 Nov 1977
51. Poland DTC 23 Apr 1993 26 Dec 1993
52. Portugal DTC 7 Sep 1999 16 Mar 2001
53. Qatar DTC 28 Nov 2006 5 Oct 2007
DTC Protocol 22 Sep 2009 --
54. Romania DTC 21 Feb 2002 28 Nov 2002
55. Russia Federation DTC 9 Sep 2002 16 Jan 2009
56. Saudi Arabia DTC 3 May 2010 --
57. Slovak Republic DTC 9 May 2005 12 Jun 2006
58. Slovenia DTC 8 Jan 2010 25 Dec 2010
59. South Africa DTC 23 Dec 1996 5 Dec 1997
60. Sri Lanka DTC 29 May 1979 1 Feb 1980
61. Sweden DTC 17 Jun 1968 14 Feb 1969
62. Switzerland DTC 24 Feb 2011 --
63. Thailand DTC 15 Sep 1975 27 Apr 1976
64. Turkey DTC 9 Jul 1999 27 Aug 2001
65. Ukraine DTC 26 Jan 2007 18 Dec 2009
66. United Arab Emirates DTC 1 Dec 1995 30 Aug 1996
67. United Kingdom DTC Protocol 24 Aug 2009 8 Jan 2011
68. Uzbekistan DTC 24 Jul 2008 28 Nov 2008
69. Vietnam DTC 2 Mar 1994 9 Sep 1994
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