More Than 100 Jurisdictions Including Dubai, Hong Kong, Singapore and Switzerland, Have Committed to Implement the CRS, an Internationally Agreed Standard

Under the Common Reporting Standard (CRS), which has been in effect since 1 January 2017, Singapore-based Financial Institutions (SGFIs) – depository institutions such as banks, specified insurance companies, investment entities and custodial institutions – are now required to establish the tax residency status of all their account holders, and report to IRAS, the financial account information of account holders who are tax residents of jurisdictions with which Singapore has a Competent Authority Agreement [1] (CAA) to exchange the information.

All account holders of SGFIs, when requested by their respective FIs, should provide their FIs with information and supporting documents to establish their tax residency status. For accounts opened before 1 January 2017, FIs may contact the account holders to confirm their tax residency status if the FIs hold information that indicates they could be foreign tax residents. For new accounts opened on or after 1 January 2017, FIs will use a self-certification form, to be filled in by account holders, to collect tax residency information.

It is important that account holders cooperate fully with their FIs when approached. If the account holders do not respond to their FIs’ requests to confirm their tax residency status, the FIs will have to treat the account holders as tax residents in the respective foreign jurisdictions, based on the information available to the FIs. Account holders should also inform their FIs of any change in circumstances, such as long-term job postings to a foreign jurisdiction, which may affect their tax residency status. Account holders are also reminded to ensure that all submissions to FIs are accurate. Deliberately providing false information to the FIs on an account holder’s tax residency status is an offence[2] under the CRS law.

For more information on CRS and how account holders may be affected, visit https://www.iras.gov.sg/taxes/international-tax/common-reporting-standard-(crs)/basic-information-for-account-holders-of-financial-institutions. Individuals who wish to subscribe to IRAS’ eAlerts to be informed when there are updates to the IRAS CRS webpage can do so at https://www.iras.gov.sg/subscribe-to-iras-ealerts

Common Reporting Standard

The CRS is an internationally agreed standard for the automatic exchange of information (AEOI) on financial accounts between jurisdictions for tax purposes, with the objective of enhancing tax transparency to detect and deter tax evasion through the use of offshore bank accounts. More than 100 jurisdictions, including major financial centres such as Dubai, Hong Kong and Switzerland, have committed to implement AEOI based on the CRS and will commence AEOI under the CRS either in 2017or 2018. Singapore has made an international commitment to commence AEOI under the CRS in 2018.

Inland Revenue Authority of Singapore

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Frequently Asked Questions (FAQ)

Account Holders

1. How can account holders ensure that their FIs are not asking for more information than is required for AEOI purposes?

FIs typically use a self-certification form to collect tax residency information.

For individuals, a valid self-certification for CRS purposes will contain the account holder’s (i) name, (ii) residence address, (iii) all jurisdiction(s) of residence for tax purposes, (iv) tax identification number(s) for each jurisdiction that is indicated in (iii), and (v) date of birth.

For entities, a valid self-certification for CRS purposes will contain the account holder’s (i) name, (ii) registered/business address, (iii) all jurisdiction(s) of residence for tax purposes, (iv) tax identification number(s) for each jurisdiction that is indicated in (iii), (v) a description of the type of financial institution or non-financial entity, and (vi) details of controlling person(s), if the entity is a passive non-financial entity.

In addition, FIs may ask the account holders to explain or provide supporting document to verify the accuracy of the information that they have provided on the self-certification.

Account holders are advised to check with their FIs if they are unsure of the purpose for which the information is requested for.

2. How do account holders determine the jurisdiction where they are tax resident in?

In general, the tax residency of:

• Individuals, is determined by the period of a person’s physical presence or duration of stay in a jurisdiction in a year (e.g. whether the individual’s stay in a jurisdiction is over 183 days over a tax year)

• Partnerships, is determined by the entity's registered address, principal office or place of effective management

• Companies, is determined by the place of incorporation or place of effective management

• Trusts, is determined by where the trustee(s) is resident in.

As the rules for tax residency vary among jurisdictions, an account holder can:

(i) Refer to the Rules Governing Tax Residence published by various jurisdictions for information on their respective  tax residency rules;

(ii) Check with the tax authority of the jurisdiction which he thinks he may be a tax resident.

(iii) Consult a tax advisor.  

Information Exchange with Jurisdictions

3. Will the information collected be shared with non-tax authorities?

The information provided by Singapore shall only be disclosed and used for tax purposes (e.g. assessment, collection, recovery, enforcement, prosecution, determination of appeals for tax purposes and the oversight of these functions). Information collected may not be used for other purposes unless such disclosure is also permitted in Singapore and with approval from Singapore.

[1] A CAA enables the implementation of information exchange under the CRS based on existing legal instruments such as the Convention on Mutual Administrative Assistance in Tax Matters or a bilateral tax treaty. As of 6 Jan 2017, Singapore has signed CAAs with Australia, United Kingdom, Japan, Republic of Korea, South Africa, Norway, Italy, Canada, Finland, the Netherlands, Iceland, Malta, Ireland, Latvia and New Zealand.

[2] If convicted of the offence, an account holder could face a fine of up to $10,000, imprisonment of up to two years or both.