VZCZCXRO4431
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #1016 2930930
ZNR UUUUU ZZH
R 200930Z OCT 09
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 7333
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SINGAPORE 001016 
 
TREASURY FOR TRAND, MNUGENT 
STATE PASS USTR 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV SN
 
SUBJECT:  SINGAPORE PASSES TAX INFO SHARING LAW, EYES U.S. TAX 
AGREEMENT 
 
REF:  SINGAPORE 381 
 
¶1.  (SBU) Summary:  Singapore took a step to exiting the 
Organization for Economic Cooperation and Development (OECD) "grey 
list" of tax havens by passing tax amendments that improve its 
ability to exchange tax information with foreign authorities. 
Singapore is also renegotiating existing Double Taxation Agreements 
(DTA) to include the OECD standard on exchange of information. 
Finance officials hope the tax changes will open the way to begin 
negotiations for a DTA with the United States.  Officials said 
previous roadblocks to completing an agreement should no longer be 
barriers.  End Summary. 
 
¶2.  (SBU) Singapore's Parliament passed amendments to its Income Tax 
Act October 19 that incorporate the OECD standard for exchange of 
information through Avoidance of Double Taxation Agreements (DTAs). 
The amendments will become law after approval by the President and 
being published in the government gazette, a process GOS officials 
believe will be completed within three weeks. 
 
Coming Off the Grey List 
------------------------ 
 
¶3.  (SBU) Singapore pushed through the amendments in a bid to shed 
its reputation as a haven for tax cheats.  In April the OECD placed 
Singapore on its "grey list" of countries that had committed to the 
exchange of information standard but had yet to fully implement it, 
much to the displeasure of Singapore officials (reftel).  According 
to the OECD, the standard requires exchange of information on 
request in all tax matters for the administration and enforcement of 
domestic tax law without regard to a domestic tax interest 
requirement or bank secrecy for tax purposes.  The new amendments 
lift Singapore's previous domestic interest condition that allowed 
Singapore tax authorities to share tax information only if that 
information was relevant to the enforcement of Singapore's own tax 
laws.  However, Finance Minister Tharman told Parliament that 
requests from foreign authorities would need to be "clear, specific, 
relevant, and consistent with the exchange of information standard," 
and that tax authorities would not accept "fishing expeditions" -- 
indiscriminate requests without specific information. 
 
¶4.  (SBU) Singapore is also renegotiating existing DTAs to include 
the exchange of information standard.  The OECD has stated it will 
remove countries from the grey list after they have signed at least 
twelve DTAs with the standard language.  Singapore has renegotiated 
eleven since April, and expects to sign several more within a matter 
of weeks.  The treaties will come into force after the tax 
amendments become law.  FOO Gouzhi, Head of International Tax at the 
Ministry of Finance, told Econoff that the Ministry does not plan to 
renegotiate all its DTAs, but will renegotiate agreements with 
countries that would like the exchange of information language 
included in the agreement. 
 
And Now For a U.S. DTA? 
----------------------- 
 
¶5.  (SBU) Foo said Singapore is open to discussing a DTA with the 
United States based on the U.S. model, and the GOS is prepared to 
move ahead with negotiations whenever the U.S. agrees.  Earlier 
discussions about a possible DTA with the United States in 2006 
foundered in part on Singapore's lack of exchange of information 
provisions in their tax laws, but also their unwillingness to 
include limitation of benefits provisions in the agreement that 
would prevent third country residents from obtaining treaty 
benefits.  Foo said Singapore would be willing to discuss this issue 
at future negotiations and did not believe it would be a barrier to 
concluding a DTA. 
 
SHIELDS