It’s not hard to see what brings a torrent of foreign investors to Singapore’s burgeoning
economy. From low personal and corporate tax rates that have constantly stayed below
20% to becoming a global financial centre to rival Hong Kong, Singapore has had no
problem attracting the likes of ultra-wealthy entrepreneurs, investors, and property developers.Singapore also boasts amenities that even the most discerning traveller would be delighted with, from super-yachts and designer stores to the yearly Formula One race.
owever, what is of concern to the city-state’s government are the suspected growing numbers of tax evaders using the county as a tax haven. Germany has found tax evasion to be a growing issue, with Germany recently signing an information-sharing agreement with a country synonymous with being a tax haven Switzerland.
Now with Switzerland losing it tax haven crown, Germany’s government is worried some
of their ultra-wealthy citizens may use Singapore to evade tax, before the agreement
between Germany and Switzerland becomes law. Ronen Palan, a economics professor
at City University London, says “The perception is that Swiss banks have concluded
Switzerland is unlikely to remain a tax haven for much longer, and Singapore is the new
place to do business.”
Due to this unease, Singapore and Germany have agreed on a deal where the two
countries banks will exchange information much more openly than before, in an effort to
put off any would be tax evaders.
In addition to the Germany tax treaty, a further 35 treaties have been revised by Singapore
in order to remove barriers about exchanging information on suspected tax evaders. A
new law which comes into effect next year makes it a crime for financial advisers to assist
their clients to evade taxes, and could even see them in court facing money laundering charges.
by Finbarr Toesland
