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Singapore Discusses Digital Economy Tax Challenges

by Mary Swire,, Hong Kong

24 August 2017

Singapore is taking a three-pronged approach to tackling the international tax challenges posed by the digital economy, the country's Senior Minister for Law and Finance, Indranee Rajah, has said.

Speaking at the Third Annual Conference organized by the SMU-TA Centre for Excellence in Taxation on August 17, 2017, the Minister said that Singapore is committed to providing a stable business environment for businesses by upholding international principles and participating in international tax reform efforts. Rajah told participants that Singapore advocates three high-level principles specific to digital economy taxation: tax certainty for businesses; tax neutrality between traditional and digital business models; and international consensus.

Rajah said that a divergence in the positions of jurisdictions on the taxation of the digital economy has led to the introduction of unilateral tax measures and has resulted in greater uncertainty for multinational businesses. She stressed that Singapore, being a member of the OECD's Task Force on the Digital Economy (TFDE), proposes to participate actively in the discussions of the TFDE to shape outcomes, and work together with the international community to ensure consistent implementation of reform measures and a level-playing field across jurisdictions. "Singapore supports jurisdictions working together at international fora to achieve consensus on issues relating to the taxation of the digital economy," she told participants.

Rajah said that Singapore will continue to engage businesses to ensure that the country's tax system remains focused on achieving growth.

The Minister pointed out that the Inland Revenue Authority of Singapore has established good working relationships with treaty partners to prevent disputes and to provide certainty to taxpayers through advance pricing arrangements. "We believe that effective dispute resolution can help bring certainty and facilitate cross-border investment and trade flows. In Singapore's recent signing of the Multilateral Instrument, we have also opted to include clauses on the adoption of mandatory binding arbitration in our tax treaties, on a reciprocal basis," she said.

TAGS: environment | compliance | Finance | tax | investment | business | value added tax (VAT) | tax compliance | tax avoidance | law | Organisation for Economic Co-operation and Development (OECD) | Singapore | ministry of finance | tax authority | agreements | legislation | tax planning | transfer pricing | advance pricing agreement (APA) | tax reform | standards | trade | Economy | Tax | Tax Evasion | BEPS

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