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Singapore Tax Official Sets Out BEPS Response

by Mary Swire, Tax-News.com, Hong Kong

12 September 2016


Singapore is to take a three-pronged approach to implementing the OECD's base erosion and profit shifting recommendations, Singapore's Senior Minister for Law and Finance, Indranee Rajah, has said.

Speaking at the second annual conference organized by the SMU-TA Centre for Excellence in Taxation on September 9, 2016, the minister said: "Singapore will continue to ensure that our tax incentives are relevant, target substantial activities, and produce economic spin-offs such as the generation of good jobs. The incentives should offer tax benefits that are commensurate with the activities carried out in Singapore, and should not encourage artificial shifting of profits."

Rajah pointed out that Singapore will continue to strengthen bilateral ties with its partner tax authorities. She said: "With the implementation of BEPS, there will inevitably be more disputes, leading to greater uncertainty and complexity for businesses. Having good working relationships [with foreign tax authorities] will help us to iron out the issues which will inevitably arise. IRAS already works closely with our treaty partners on mutual agreement procedures (MAP) under our tax treaties, as well as with taxpayers on advance pricing arrangement (APA) cases and will continue to maintain an open dialogue with our partner tax authorities to develop robust transfer pricing practices. Together, these facilities help to resolve and prevent disputes."

The minister revealed that the tax authority has stepped up resources for APAs and MAPs to further strengthen its capacity to deal with disputes in the post-BEPS environment and that Singapore is open to considering arbitration provisions in its tax treaties to provide taxpayers with an additional dispute resolution mechanism. She called on taxpayers to do their part, by ensuring that they have robust transfer pricing policies and documentation.

Finally, Rajah said that Singapore will continue to engage in shaping international tax rules: "As a member of the inclusive framework and also a member of the Steering Group elected to guide the work of the inclusive framework, Singapore will work with the international community to ensure the consistent implementation of the BEPS recommendations to create a level-playing field across all jurisdictions. It is important that the voices of small open economies are heard and considered, as they will be affected by BEPS."

TAGS: environment | Finance | tax | investment | business | tax avoidance | tax incentives | law | Singapore | ministry of finance | tax authority | agreements | multinationals | tax planning | transfer pricing | advance pricing agreement (APA) | tax reform | trade | Tax | BEPS

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