Tag Archives: BEPS

Income Tax – Public Consultation on Draft Income Tax (Amendment) Bill 2017


The Ministry of Finance has published for public consultation the Draft Income Tax (Amendment) Bill 2017 to incorporate 34 proposed legislative amendments, including:

1.   Eight Budget 2017 changes, including

  •  Enhancement and extension of the Corporate Income Tax (CIT) rebate for Year of Assessment (YA) 2017 and YA 2018.
  • Introduction of the Personal Income Tax rebate of 20% (capped at S$500) for YA 2017.
  • Liberalisation of the tax deduction for payments under Cost Sharing Agreements (CSAs) for Research and Development (R&D) projects.

2.  Amendment to introduce mandatory Transfer Pricing Documentation Requirement 

To limit compliance burden for smaller businesses, the mandatory TPD requirement will only apply to businesses with a turnover exceeding $10m and significantly related party transactions. The majority of companies will not be affected, as this change will only be relevant to fewer than 5% of all companies, many of which have already been maintaining TPD.

3. 25 Other non-budget changes including

  • Amendments relating to third-party voluntary contributions to the Medisave accounts of private sector employees and self-employed persons (SEPs).
  • Changes to enable the Minister for Finance to implement Singapore’s obligations under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS).

The consultation exercise will end on 10 July 2017.

If you have any questions regarding the above, contact us at support@whm-consulting.com.

Singapore To Sign The Multilateral Convention To Implement Tax Treaty Related Measures To Prevent BEPS


On 7 June 2017, Singapore has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”), with over 60 other jurisdictions.

The signing of this MLI represents Singapore’s commitment to upholding the principles behind BEPS, i.e.  profits should be attributable to the jurisdictions where the substantial economic activities giving rise to such profits are conducted.

The Finance Minister, Mr. Heng Swee Keat said

“Singapore strongly supports the principle that profits should be attributable to the jurisdiction where substantive economic activities generating the profits are based.  Signing the Multilateral Instrument allows Singapore to swiftly update its wide network of Avoidance of Double Taxation Agreements to internationally agreed standards. Singapore’s signing of the Multilateral Instrument reaffirms Singapore’s commitment and support to the BEPS Project.”

What is the impact on Singapore’s DTA network when Singapore signs the MLI?

The MLI provides flexibility for a jurisdiction to

  • determine which of its DTAs it would like to amend using the MLI; and
  • indicate which provisions in the MLI it would like to adopt and how such provisions should be adopted.

For example, if both Singapore and Jurisdiction A have signed the MLI, the bilateral DTA between Singapore and Jurisdiction A will be amended only if both Singapore and Jurisdiction A indicate that they would like to amend their bilateral DTA using the MLI.

In the MLI context, such a bilateral DTA is referred to as a “Covered Tax Agreement (CTA)”.  A provision in the DTA between Singapore and Jurisdiction A (i.e. the CTA) will be amended by an MLI provision only if both Singapore and Jurisdiction A have taken the same position regarding that provision in the MLI.

At the point of signing the MLI in June 2017, Singapore has provided a provisional list of the DTAs that it would like to amend using the MLI, as well as its provisional positions on the MLI provisions. This provisional list may be amended and will only be confirmed upon ratification of the MLI.  Singapore has included 68 of its 82 comprehensive DTAs after considering various factors, such as our DTA partners’ commitment to the BEPS Project. These DTAs will be amended by the MLI only if the respective DTA partners also sign the MLI and have included the respective DTAs under the scope of the MLI.

How did Singapore determine its positions on the MLI?

The MLI allows jurisdictions to swiftly implement the tax treaty related BEPS recommendations, which include both mandatory provisions (i.e. the minimum standards under the BEPS Project) as well as non-mandatory provisions.

Singapore will be adopting these mandatory provisions in the MLI,

(i) Article 6 (Purpose of a covered tax agreement) – To include a statement of intent in the preamble of the covered tax agreement that the DTA is to eliminate double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance

(ii) Article 7 (Preventing treaty abuse) – To include a general anti-abuse rule in the covered tax agreement, commonly known as the Principal Purpose Test (PPT).

(iii) Article 16 (Mutual Agreement Procedure) – To include a mechanism to allow a Singapore resident taxpayer to seek assistance from IRAS when the taxpayer encounters taxation in a DTA jurisdiction that is not in accordance with the intended application of the DTA.

Singapore will also be adopting a number of non-mandatory provisions in the MLI, which it believes will be beneficial for its taxpayers.  One such example is the adoption of the mandatory binding arbitration provision in our DTAs. This provision will provide an alternative dispute resolution mechanism if the competent authorities are unable to reach agreement or are unable to do so in a timely manner.  The mandatory binding arbitration provision will be included in our DTAs if the respective DTA partners also choose to adopt the provision.

If you have any questions, contact us at support@whm-consulting.com

Income Tax – Iceland signed the Competent Authority Agreement on the Automatic Exchange of Information


It was announced on IRAS’ website that on 15 December 2016, IRAS and the Tax Authorities for Iceland signed the Competent Authority Agreement (“Agreement“) on the automatic exchange of financial account information (“AEOI“) based on the Common Reporting Standard (“CRS“).

Singapore and Iceland will commence AEOI under the CRS by September 2018. Under this Agreement, IRAS will automatically exchange with the Iceland Tax Authorities, financial account information of accounts in Singapore held by the respective tax residents while the Iceland Tax Authorities will automatically exchange with IRAS, financial account information of accounts in the respective jurisdictions held by Singapore tax residents.

If you have any question regarding the above, contact us at support@whm-consulting.com.

Income Tax – The Netherlands signed the Competent Authority Agreement on the Automatic Exchange of Information


It was announced on IRAS’ website that on 5 December 2016, IRAS and the Tax Authorities for the Netherlands signed the Competent Authority Agreement (“Agreement“) on the automatic exchange of financial account information (“AEOI“) based on the Common Reporting Standard (“CRS“).

Singapore and the Netherlands will commence AEOI under the CRS by September 2018. Under this Agreement, IRAS will automatically exchange with the Dutch Tax Authorities, financial account information of accounts in Singapore held by the respective tax residents while the Dutch Tax Authorities will automatically exchange with IRAS, financial account information of accounts in the respective jurisdictions held by Singapore tax residents.

If you have any question regarding the above, contact us at support@whm-consulting.com.

Income Tax – Finland signed the Competent Authority Agreement on the Automatic Exchange of Information


It was announced on IRAS’ website that on 22 November 2016, IRAS and the Tax Authorities for Finland signed the Competent Authority Agreement (“Agreement“) on the automatic exchange of financial account information (“AEOI“) based on the Common Reporting Standard (“CRS“).

Singapore and Finland will commence AEOI under the CRS by September 2018. Under this Agreement, IRAS will automatically exchange with the Finnish Tax Authorities, financial account information of accounts in Singapore held by the respective tax residents while the Finnish Tax Authorities will automatically exchange with IRAS, financial account information of accounts in the respective jurisdictions held by Singapore tax residents.

If you have any question regarding the above, contact us at support@whm-consulting.com.