Singapore, Indonesia to enhance cooperation on sharing tax information
Singapore’s Ministry of Finance say both parties enjoy “excellent cooperation” regarding tax matters, and have agreed to update the existing Avoidance of Double Taxation Agreement as the next step.
SINGAPORE: The Republic and Indonesia will be looking to increase cooperation on the sharing of tax information in the coming days, after both parties agreed to update the existing Avoidance of Double Taxation Agreement (DTA) to promote further investment and trade flows, according to the Ministry of Finance on Tuesday (Dec 16).
Singapore’s Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam met with Indonesia’s Finance Minister Bambang Brodjonegoro on Monday, and they noted the excellent cooperation enjoyed by both countries’ authorities on tax matters.
Going forward, the plan is to update the DTA and this includes incorporating the internationally agreed standard on exchange of information upon request into the agreement, a MOF spokesperson said.
As for automatic exchange of information (AEOI), Mr Tharman and Mr Bambang noted that both countries are members of the Global Forum for Transparency and Exchange of Information and have endorsed AEOI as a global standard and committed to timelines for its implementation.
Singapore is targeting an implementation date of 2018, while Indonesia’s deployment deadline is by 2017, the spokesperson added.
The MOF added that Singapore’s implementation of AEOI is guided by the following principles:
Singapore will be able to implement AEOI if it is adopted in all key financial centres in Europe and Asia, to avoid regulatory arbitrage.
AEOI also needs to be done within a robust framework of law to protect taxpayer confidentiality and ensure that the information is used properly. This is particularly important as AEOI entails the transmission of sensitive taxpayer information which should be safeguarded.
There must be reciprocity with any future AEOI partners in terms of information exchanged.
“Singapore’s priority now is to implement the Foreign Account Tax Compliance Act (FATCA) Intergovernmental Agreement properly, before we take on additional AEOI obligations,” the spokesperson stated. “Singapore continues in the meantime to effectively exchange information with our EOI partners, including Indonesia.”
The MOF’s statement followed a Reuters report on Monday stating that both countries will step up efforts to share tax-related information to “tighten loopholes on tax evasion in each other’s countries”.
Citing the Indonesian finance ministry, the report stated: “Exchanging information by request is not enough to reveal all assets hidden by citizens of both countries. Therefore, to accelerate information flows, Indonesia and Singapore have committed to exchange information automatically to complement the mechanism for information exchange by request.”
