IRAS E Tax Guide Common Reporting Standard

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Common Reporting Standard
IRAS e-Tax Guide (Draft)
Common Reporting Standard
Common Reporting Standard
1
Published by
Inland Revenue Authority of Singapore
Published on 25 Aug 2017
The information provided is intended for better general understanding and is not intended to
comprehensively address all possible issues that may arise. The contents are correct as at 25082017
and are provided on an “as is” basis without warranties of any kind. IRAS shall not be liable for any
damages, expenses, costs or loss of any kind however caused as a result of, or in connection with your
use of this user guide.
While every effort has been made to ensure that the above information is consistent with existing
policies and practice, should there be any changes, IRAS reserves the right to vary its position
accordingly.
© Inland Revenue Authority of Singapore
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Preface
This draft e-Tax Guide is intended to assist businesses and those affected by the
Common Reporting Standard (“CRS)”, in particular Singaporean Financial
Institutions, in understanding the CRS framework and their CRS compliance
obligations.
IRAS invites all interested parties to submit your comments on this draft e-Tax
Guide using the feedback template (in Annex A) and email it to CRS@iras.gov.sg
by 25 September 2017. We regret that feedback received after 25 September
2017 will not be considered.
Respondents are requested to observe these guidelines when submitting your
feedback:
a. Please identify yourself as well as the organisation you represent (if any)
so that we may follow up with you to clarify your comments, if necessary.
b. Be clear and concise in your comments.
c. Focus your comments on how the user guide can be better written to
make it clearer.
d. Use the prescribed template provided to organise your feedback.
e. As far as possible, please explain your points with illustrations or
examples.
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TABLE OF CONTENTS
1 AIM -------------------------------------------------------------------------------------------------------- 4
2 AT A GLANCE ------------------------------------------------------------------------------------------- 4
3 GLOSSARY ----------------------------------------------------------------------------------------------- 5
4 BACKGROUND ---------------------------------------------------------------------------------------- 12
5 KEY IMPLEMENTATION MILESTONES ---------------------------------------------------------- 14
6 FINANCIAL INSTITUTIONS ------------------------------------------------------------------------- 15
7 NON-REPORTING FINANCIAL INSTITUTIONS ------------------------------------------------- 28
8 NON-FINANCIAL ENTITIES (NFES) --------------------------------------------------------------- 32
9 FINANCIAL ACCOUNTS ----------------------------------------------------------------------------- 35
10 EXCLUDED ACCOUNTS ----------------------------------------------------------------------------- 39
11 DUE DILIGENCE PROCEDURES UNDER THE CRS ---------------------------------------------- 44
12 REGISTRATION --------------------------------------------------------------------------------------- 70
13 REPORTING ------------------------------------------------------------------------------------------- 71
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1 Aim
1.1 The Common Reporting Standard (CRS) is the global standard for the
automatic exchange of Financial Account information between jurisdictions
for tax purposes, with the objective of detecting and deterring tax evasion by
taxpayers through the use of offshore banks and other Financial Accounts.
1.2 Singapore has committed to implement CRS, with the first exchange of
information relating to calendar year 2017 to take place by September 2018.
This e-Tax Guide is intended to provide guidance to entities, in particular,
Singaporean Financial Institutions (SGFIs), in understanding the CRS
framework and their CRS compliance obligations.
2 At a glance
2.1 Under the CRS legislation, an SGFI that is treated as a Reporting SGFI is
required to conduct due diligence on all Financial Accounts it maintains. With
respect to each such Financial Account, the Reporting SGFI is required to (i)
determine the tax residence(s) of its Account Holder and, if the Account
Holder is a Passive NFE, the Controlling Persons of the Passive NFE; and
(ii) report to IRAS on an annual basis, the particulars and account information
of that Account Holder, and where applicable, the particulars of the
Controlling Persons that are tax residents of jurisdictions that Singapore has
a Competent Authority Agreement (CAA) for CRS with. This reporting is to
be done by 31 May of the year following the calendar year during which the
Reportable Accounts were maintained.
2.2 IRAS in turn will transmit the Financial Account information of such
Reportable Persons to the respective tax authority of the Reportable
Jurisdiction(s) in which such persons are tax resident pursuant to the terms
of the applicable CAAs.
2.3 This e-Tax Guide covers:
the types of entities that are regarded as FIs (and Reporting SGFIs),
Non-Reporting FIs and Non-Financial Entities under the CRS;
the types of in-scope Financial Accounts and Excluded Accounts;
the due diligence procedures required to be applied by Reporting SGFIs
to identify Reportable Accounts;
the registration requirements of Reporting SGFIs; and
the information to be reported by Reporting SGFIs.
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3 Glossary
3.1 The following terms and acronyms are used through this e-Tax Guide.
Term
Description
AEOI
Automatic Exchange of Information
It entails systematic and regular transmission of specified
information between two jurisdictions.
Active NFE
Active Non-Financial Entity as described in Section 8.5 of this e-
Tax Guide
AML
Anti-Money Laundering
CAA
Competent Authority Agreement
Cash Value
“Cash Value” as defined in Section VIII, paragraph C(8) of the
Schedule of the CRS Regulations
CCP
Central Counterparty Clearing House
CDA
Child Development Account as defined in Regulation 2 of the
Child Development Co-Savings Regulations.
CIS
Collective Investment Scheme
Commentary
Commentaries on the Common Reporting Standard
Controlling
Person
The natural person who exercises control over an Entity.
For an Entity that is a legal person, the term “Controlling Persons”
means the natural person(s) who exercises control over the
Entity. “Control” over an Entity is generally exercised by the
natural person(s) who ultimately has a controlling ownership
interest in the Entity. A “control ownership interest” depends on
the ownership structure of the legal person and is usually
identified on the basis of a threshold applying a risk-based
approach (e.g. any person(s) owning more than a certain
percentage of the legal person, such as 25%). Where no natural
person(s) exercises control through ownership interests, the
Controlling Person(s) of the Entity will be the natural person(s)
who exercises control of the Entity through other means. Where
no natural person(s) is identified as exercising control of the
Entity, the Controlling Person(s) of the Entity will be the natural
person(s) who holds the position of senior managing official.
In the case of a trust, such term means the settlor(s), the
trustee(s), the protector(s) (if any), the beneficiary(ies) or
class(es) of beneficiaries, and any other natural person(s)
exercising ultimate effective control over the trust. The settlor(s),
the trustee(s), the protector (if any), the beneficiaries or class of
beneficiaries must always be treated as Controlling Persons of
the trust, regardless of whether or not any of them exercises
control over the trust. In addition, any other natural person(s)
exercising ultimate effective control over the trust (including
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Term
Description
through a chain of control or ownership) must also be treated as
a Controlling Person of the trust.
In the case of a legal arrangement other than a trust, such term
means persons in equivalent or similar positions as those that are
Controlling Persons of a trust.
In relation to legal persons that are functionally similar to trusts
(e.g. foundations), Reporting FIs should identify Controlling
Persons through similar customer due diligence procedures as
those required for trusts, with a view to achieving appropriate
levels of reporting.
The term “Controlling Persons” corresponds to the term
“beneficial owner” as described in Recommendation 10 and the
Interpretative Note on Recommendation 10 of the Financial
Action Task Force (FATF) Recommendations (as adopted in
February 2012), and must be interpreted in a manner consistent
with the FATF Recommendations.
Convention
Convention on Mutual Administrative Assistance in Tax Matters
CPF
Central Provident Fund
CRS
The Common Reporting Standard
The Standard for Automatic Exchange of Financial Account
Information in Tax Matters, developed by the OECD.
CRS
Regulations
Refers to the Income Tax (International Tax Compliance
Agreements) (Common Reporting Standard) Regulations 2016.
CSD
Central Securities Depository
CSD Related
Entity
A Singapore entity that is a direct or indirect subsidiary or affiliate
of the CSD used solely to provide services ancillary to the
business operated by the CSD.
Custodial
Institution
A Custodial Institution is a financial entity that is treated as an FI
and is described in Section 6.3 of this e-Tax Guide. This includes
financial custodians and brokers holding Financial Assets on
behalf of clients.
Depository
Institution
A Depositary Institution is a financial entity that is treated as an FI
and is described in Section 6.4 of this e-Tax Guide. This category
of FI includes banks and institutions that accept deposits in the
ordinary course of a banking business.
Entity
A legal person or a legal arrangement such as a trust.
Entity
Account
A Financial Account held by persons who are not individuals.
FATCA
Foreign Account Tax Compliance Act
A reporting regime for Financial Institutions with respect to
Financial Accounts that are held by US persons for tax purposes.
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Term
Description
FAQ
Frequently Asked Question
FATF
Financial Action Task Force
FI
Financial Institution
A Custodial Institution, a Depository Institution, an Investment
Entity or a Specified Insurance Company.
Financial
Account
An account maintained by a Financial Institution, and includes a
Depository Account, Custodial Account, and:
a. in the case of an Investment Entity, any Equity or Debt Interest
in the Financial Institution. Notwithstanding the foregoing, the
term “Financial Account” does not include any Equity or Debt
Interest in an Entity that is an Investment Entity solely because
it (i) renders investment advice to, and acts on behalf of, or (ii)
manages portfolios for, and acts on behalf of, a customer for
the purpose of investing, managing, or administering Financial
Assets deposited in the name of the customer with a Financial
Institution other than such Entity;
b. in the case of a Financial Institution not described in
subparagraph (a), any Equity or Debt Interest in the Financial
Institution, if the class of interests was established with a
purpose of avoiding reporting; and
c. any Cash Value Insurance Contract and any Annuity Contract
issued or maintained by a Financial Institution, other than a
noninvestment-linked, non-transferable immediate life annuity
that is issued to an individual and monetises a pension or
disability benefit provided under an account that is an
Excluded Account.
The term “Financial Account” does not include any account that
is an Excluded Account.
Foreign
Jurisdiction
A jurisdiction outside Singapore.
High Value
Account
A Preexisting Individual Account with an aggregate balance or
value that exceeds US$1,000,000 as of 31 December 2016 or 31
December of any subsequent year.
IGA
Intergovernmental Agreement
Indirect CSD
Account
An account where the participants of the Singapore securities
settlement system hold interests recorded in a CSD through
SGFIs (such as depository agents).
Individual
Account
A Financial Account held by individuals.
Investment
Entity
An Investment Entity is a financial entity that is treated as an FI
and is described in Section 6.5 of this e-Tax Guide. This may
include institutionally managed investment funds and certain FIs
engaged in portfolio and fund management.
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Term
Description
IRAS
Inland Revenue Authority of Singapore
KYC
Know-Your-Client
MAS
Monetary Authority of Singapore
MCAA
Multilateral Competent Authority Agreement
LLP
Limited Liability Partnership
Lower Value
Account
A Preexisting Individual Account with an aggregate balance or
value as of 31 December 2016 that does not exceed
US$1,000,000.
New Account
A Financial Account maintained by a Reporting SGFI and which
is opened on or after 1 January 2017.
New Entity
Account
A New Account held by one or more Entities.
New
Individual
Account
A New Account held by one or more persons who are
individuals.
NFE
Non-Financial Entity
A NFE is an Entity that does not meet the definition of an FI.
Non-
Reporting
SGFI
Non-Reporting Singaporean Financial Institution
Any SGFI, resident in Singapore, that is described in Section 7
of this guide as a Non-Reporting SGFI.
OECD
Organisation for Economic Co-Operation and Development
Participating
Jurisdiction
A Participating Jurisdiction for purposes of CRS in Singapore
includes all jurisdictions that have publicly and at government
level committed to adopting CRS by 2018 as Participating
Jurisdictions and which are listed on the IRAS CRS webpage.
PIC
Personal Investment Company
Preexisting
Account
Either
a. a Financial Account maintained by the Reporting SGFI as of
31 December 2016;
or
b. any other Financial Account maintained by the Reporting
SGFI on or after 1 January 2017 if all of the following
conditions are satisfied:
i. as of 31 December 2016, the Account Holder of the
Financial Account has a Financial Account with the
Reporting SGFI or a local entity that is related to the
institution;
ii. the Reporting SGFI treats one or more of the Financial
Accounts mentioned in sub ‑paragraph (a), of the
Account Holder, and all other Financial Accounts of the
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Term
Description
Account Holder that are treated as Preexisting
Accounts under sub‑paragraph (b) that are maintained
by —
(A) the institution; and
(B) all local entities that are related to the institution
(if any),
as a single Financial Account for the purpose of
determining whether an amount of any matter
mentioned in a prescribed provision in respect of such
single Financial Account, exceeds the maximum
amount specified for that matter in that provision;
iii. the Reporting SGFI does not know and does not have
any reason to believe that any self ‑certification or
Documentary Evidence of the Financial Account or any
of the Financial Accounts treated as a single Financial
Account under sub ‑paragraph (ii) is incorrect or
unreliable;
iv. where the Reporting SGFI is required by any written
law to perform AML / KYC procedures on the Financial
Account, the institution has performed the AML / KYC
procedures on the Financial Account;
v. the Reporting SGFI does not require the provision of
any new, additional or amended information by the
Account Holder for the opening of the Financial
Account, other than for the purposes of facilitating the
institution compliance with its CRS due diligence and
reporting obligations.
Preexisting
Entity
Account
A Preexisting Account that is held by one or more Entities.
Preexisting
Individual
Account
A Preexisting Account held by one or more individuals
PSE Account
Post Secondary Education Account as defined in Section 2(1) of
the Education Endowment and Savings Schemes Act
REIT
Real Estate Investment Trust
Related
Entity
An Entity is a related entity of another Entity if:
a. one Entity controls the other Entity;
b. the 2 Entities are controlled by the same person; or
c. all the following conditions are satisfied with respect to the 2
entities:
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Term
Description
i. both Entities satisfy the condition in subparagraph
A(6)(b) of section VIII of the CRS;
ii. the assets of the two Entities are managed by the
same person;
iii. the person mentioned in subparagraph (ii) complies
with the CRS due diligence requirements with respect
to the Financial Accounts that the two Entities maintain.
Reportable
Account
A Financial Account held by one or more Reportable Persons or
by a Passive NFE with one or more Controlling Persons that is a
Reportable Person, provided it has been identified as such
pursuant to the CRS due diligence procedures.
Reportable
Person
A Reportable Jurisdiction Person other than:
A corporation the stock of which is regularly traded on one or
more established securities markets;
Any corporation that is a Related Entity of a corporation
described above;
A Governmental Entity;
An International Organisation;
A Central Bank; or
A Financial Institution.
Reportable
Jurisdiction
It refers to a jurisdiction with which Singapore has a bilateral
exchange relationship for CRS that is in force.
The list of “Reportable Jurisdictions” will be published on the IRAS
CRS webpage at
https://www.iras.gov.sg/IRASHome/CRS/.
Reportable
Jurisdiction
Person
An individual or Entity that is resident in a Reportable Jurisdiction
under the tax laws of such jurisdiction, or an estate of a decedent
who was a resident of a Reportable Jurisdiction.
For this purpose, an Entity such as a Partnership, LLP, or similar
legal arrangement that has no residence for tax purposes shall be
treated as resident in the jurisdiction in which its place of effective
management is situated.
Reporting
SGFI
Reporting Singaporean Financial Institution
It refers to:
(a) any Financial Institution (but not in relation to any
branch of the Financial Institution located outside
Singapore) that is tax resident in Singapore; or
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Term
Description
(b) any Financial Institution (in relation to its branch located
in Singapore) not resident in Singapore,
but excludes any non‑reporting Financial Institution.
Self-
certification
A “self-certification”, in relation to a Financial Account opened
with a Reporting SGFI, means a statement containing
information:
a. relating to the account;
b. reasonably required by the institution for the purpose of
complying with the due diligence and reporting obligations that
are provided for in the CRS Regulations; and
c. provided by the Account Holder, or in a case where the
Account Holder is a Passive NFE and the statement only
contains information of the residences for tax purposes of a
Controlling Person of the Account Holder, the Account Holder
or the Controlling Person.
SGFI
Singaporean Financial Institution
SGX
Singapore Exchange
Specified
Insurance
Company
A Specified Insurance Company is an insurance company that is
treated as an FI and is described in Section 6.12 of this e-Tax
Guide.
SRS
Supplementary Retirement Scheme
TIN
Taxpayer Identification Number
UEN
Unique Entity Number
US
United States
US Person
A US citizen or resident individual, a Partnership or corporation
organised in the US or under the laws of the US or any State
thereof, a trust if (i) a court within the US would have authority
under applicable law to render order or judgments concerning
substantially all issues regarding administration of the trust, and
(ii) one or more US Persons have the authority to control all
substantial decisions of the trust, or an estate of a decedent that
is citizen or resident in the US.
Wider
Approach
Approach to CRS that requires a Reporting SGFI to establish the
tax residency status of all their Account Holders, and, where the
Account Holder is a Passive NFE, the Controlling Persons of the
Passive NFE in accordance with the due diligence requirements
as set out in the CRS Regulations.
XML
Extensible Markup Language
XML Schema
CRS XML Schema
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4 Background
4.1 What is CRS?
4.1.1 The CRS is an internationally agreed standard for AEOI on financial account
information, endorsed by the OECD and the Global Forum for Transparency
and Exchange of Information for Tax Purposes. The CRS sets out the
financial account information to be exchanged, the financial institutions (FIs)
required to report, the different types of accounts and taxpayers covered, as
well as the customer due diligence procedures to be followed by FIs. The
CRS builds on the Foreign Account Tax Compliance Act (FATCA) reporting
regime to maximise efficiency and reduce costs for implementing jurisdictions
and their FIs.
4.1.2 For CRS purposes, Reporting SGFIs can build and expand upon their
existing Anti-Money Laundering (AML) / Know-Your-Client (KYC) and
FATCA compliance processes to manage the new CRS due diligence and
reporting requirements.
4.1.3 However, CRS differs from the FATCA Model 1 IGA requirements in several
ways
1
, mainly because of the multilateral dimension of the CRS. For example,
CRS focuses only on tax residence to identify Reportable Persons whereas
FATCA looks at both citizenship and tax residence in its identification of US
Persons. While FATCA does not require Reporting SGFIs to review a
Preexisting Individual Account with a balance that does not exceed
US$50,000, or a Cash Value Insurance Contract or an Annuity Contract with
a balance that does not exceed US$250,000, the CRS does not include such
thresholds to exempt Preexisting Individual Accounts from CRS due-
diligence and reporting.
4.2 CRS Implementation in Singapore
4.2.1 In response to its commitment to implement CRS, Singapore has enacted
the Income Tax (International Tax Compliance Agreements) (Common
Reporting Standard) Regulations 2016 (referred to as the ‘CRS Regulations’)
that entered into force 1 January 2017. The CRS Regulations adopt the CRS
as developed by the OECD and provide specifications as applicable to
Singapore and SGFIs.
4.2.2 In addition to the CRS Regulations, IRAS has also issued a set of CRS
Frequently Asked Questions (IRAS CRS FAQs) and an information page on
how Account Holders of Reporting SGFIs will be affected, both of which are
posted on the IRAS CRS webpage.
4.2.3 Given that CRS, as set out in the First Schedule of the CRS Regulations, is
the international AEOI Standard developed by the OECD, the OECD’s
Commentaries (referred to as the ‘Commentary’) on CRS, the CRS
1
Please refer to Part III of the CRS Implementation Handbook for a more detailed comparison of the
differences between the CRS and the FATCA Model 1 IGA.
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Implementation Handbook and the OECD’s CRS-related FAQs
2
are integral
to Singapore’s CRS implementation. Reporting SGFIs are expected to rely
closely on these materials for interpretative guidance on the due diligence
and reporting requirements of the CRS, unless they are inconsistent with
Singapore’s implementation of the Wider Approach.
4.3 The Wider Approach
4.3.1 Singapore adopts the “Wider Approach” on CRS implementation. This
requires and empowers Reporting SGFIs to establish the tax residency
status of all their Account Holders, and, where the Account Holder is a
Passive NFE, the Controlling Persons of the Passive NFE in accordance with
the due diligence requirements as set out in the CRS Regulations. The Wider
Approach is a cost-effective approach for the industry as Reporting SGFIs
would not need to repeatedly review the same Financial Accounts to re-
establish whether such accounts are reportable each time Singapore enters
into a new bilateral exchange relationship with a jurisdiction.
4.4 Participating Jurisdictions
4.4.1 Under the CRS, a Participating Jurisdiction is a jurisdiction with which:
a. an agreement is in place pursuant to which there is an obligation to
automatically exchange information on Reportable Accounts; and
b. is identified on a published list.
4.4.2 In line with the approach outlined in paragraph 31 of the CRS Implementation
Handbook, Singapore considers all jurisdictions that have publicly and at the
governmental level committed to adopt CRS by 2018 as Participating
Jurisdictions.
4.4.3 The list of Participating Jurisdictions is available on the IRAS CRS webpage.
The list of Participating Jurisdictions will be updated at least once a year to
reflect changes in jurisdictions’ commitment to and implementation of CRS.
4.4.4 The status of Participating Jurisdictions is relevant for a Reporting SGFI to
determine whether a “managed by” Investment Entity has to be classified as
a Passive NFE. If an Investment Entity, as described in Paragraph A(6)(b) of
Section VIII of the CRS, is not resident in a Participating Jurisdiction, the
Reporting SGFI is to regard such an Investment Entity Account Holder as a
Passive NFE and “look through” the Entity to determine if the Controlling
Persons of such an Entity are Reportable Persons.
2
The links to these documents are also provided on the IRAS CRS webpage.
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5 Key Implementation Milestones
5.1 The 2 diagrams below summarise the key implementation milestones in
2017 and 2018.
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6 Financial Institutions
6.1 Overview of CRS classifications for Singapore entities
6.1.1 Entities can be classified into different categories and are subject to varying
obligations and requirements particular to their categorisation. Figure 1
below summarises the steps to determine the CRS classification of an entity.
The first step to be undertaken by a Singapore entity (or its representative)
to determine its CRS classification is to establish whether it is an FI or a Non-
Financial Entity (NFE).
6.1.2 A Singapore Entity will be an FI under Regulations 4 to 8 of the CRS
Regulations if it falls within any of the following categories:
• Custodial Institution (Refer to Section 6.3 below);
• Depository Institution (Refer to Section 6.4 below);
• Investment Entity (Refer to Section 6.5 below); or
• Specified Insurance Company (Refer to Section 6.12 below).
6.1.3 Each category of FI is determined by a set of criteria, as described in the
corresponding sections listed above.
6.1.4 FIs that are resident in Singapore (Refer to Section 6.2 below) will be
classified either as Reporting SGFIs or Non-Reporting SGFIs. Reporting
SGFIs are responsible for ensuring that the CRS due diligence, registration
and reporting requirements are met. A Non-Reporting SGFI is one that
qualifies as such under Regulation 10 of the CRS Regulations (further
described in Section 7 of this e-Tax Guide). Non-Reporting SGFIs are
generally not required to perform the CRS due diligence procedures and
report on Financial Accounts.
6.1.5 Where a Singapore entity does not meet the definition of an FI, it will be
classified as an NFE. NFEs are in turn divided into two sub-categories: (i)
Active NFEs and (ii) Passive NFEs. Please refer to Section 8 of this e-Tax
Guide for more details on NFEs.
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Figure 1: Classification of an Entity
Is the Entity an FI?
The Entity is an NFE.
Section 8
Consider the definitions described in
Regulations 4 to 8 of the CRS
Regulations to determine if the
Entity is an FI.
The Entity is a not a Reporting SGFI,
but could be a Reporting FI in its
jurisdiction of residence.
Section 6.2
No
Types of FIs
Section
Custodial Institution
6.3
Depository Institution
6.4
Investment Entity
6.5
Specified Insurance Company
6.12
Is the FI resident in
Singapore?
Yes
No
Is the SGFI a Non-
Reporting FI?
Yes
The Entity is a Non-Reporting FI.
Section 7
No
The Entity is a Reporting SGFI with
CRS obligations.
Sections 9 - 12
Yes
6.2 Reporting Singaporean Financial Institutions
6.2.1 Under the CRS Regulations, a Reporting SGFI is:
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a. any FI (but not in relation to any branch of the FI located outside
Singapore) that is tax resident in Singapore; or
b. any FI, in relation to its branch located in Singapore, not resident in
Singapore,
but excludes any Non‑Reporting FI.
6.2.2 CRS provides specific rules to determine the tax residence of Entities. The
general rule is that FIs are resident in a jurisdiction based on the tax laws of
that jurisdiction. Basic residence rules and their application to FIs are shown
in the table below:
Entity
Tax residence under CRS
Entities (except trusts, and
Entities that do not have a
residence for tax
purposes)
The jurisdiction in which the Entity is resident under
the tax laws of the jurisdiction.
An Entity is resident in Singapore if control and
management of its business is exercised in
Singapore.
Entities that do not have a
residence for tax
purposes(e.g., because it
is treated as fiscally
transparent or it is located
in a jurisdiction that does
not have income tax)
In these cases, the Entity is treated as resident in
the jurisdiction where it is incorporated under the
laws of, has its place of effective management, or
where it is subject to financial supervision.
Trusts
Where one or more trustees are tax resident, unless
the required information is being reported to
another Participating Jurisdiction because the trust
is treated as a resident for tax purpose in such other
Participating Jurisdiction. A trustee is tax resident in
Singapore if:
i) the trustee is an individual and is physically
present or exercises employment in
Singapore for at least 183 days during the
calendar year; or
ii) if the trustee is an Entity and control and
management of its business is exercised in
Singapore.
6.2.3 Where an Entity, other than a trust, is tax resident in two or more Participating
Jurisdictions, it will be subject to the CRS due diligence obligations of the
Participating Jurisdiction in which it maintains the Financial Account(s), and
is required to report such Financial Accounts maintained in the Participating
Jurisdictions to the respective tax authorities. Hence, a FI that is resident in
Singapore as well as one or more Participating Jurisdictions, is not required
Common Reporting Standard
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to register with IRAS as a Reporting SGFI if (i) it does not maintain any
Financial Accounts in Singapore or (ii) it does not have a branch located in
Singapore, provided that CRS reporting and due diligence are carried out in
the other Participating Jurisdiction(s) where the Financial Accounts are
maintained or the branch is located.
6.2.4 In the case of a trust, for CRS purposes, the trust is considered to be tax
resident in a Participating Jurisdiction where one or more of its trustees are
tax resident. A trust that is a FI, and is resident for CRS purposes in
Singapore as well as one or more Participating Jurisdictions, is not required
to register with IRAS as a Reporting SGFI if all the information required to be
reported in relation to Reportable Accounts of the trust is reported to another
Participating Jurisdiction’s tax authority because the trust is treated as
resident for tax purposes in such other Participating Jurisdiction. In order to
be exempted from registration with IRAS, each trustee must be able to
demonstrate that all necessary reporting by the trust is actually taking place.
6.2.5 Subsidiaries and branches of Reporting SGFIs that are not located in
Singapore are excluded from the scope of the CRS Regulations and will not
be regarded as Reporting SGFIs. These subsidiaries and branches may
nevertheless be subject to the domestic CRS legislation of the jurisdiction
where the subsidiary or branch is located.
6.3 Custodial Institutions
6.3.1 A Custodial Institution is an Entity that holds, as a substantial portion of its
business, Financial Assets for the account of others.
6.3.2 Under Regulation 5 of the CRS Regulations, a Custodial Institution
specifically includes:
• the holder of a capital markets services licence under the Securities and
Futures Act (Cap. 289) for carrying out the regulated activity of providing
custodial services for securities;
• a person (other than an individual) that is exempt under section 99(1)(a)
to (d) and (g) and (h) of Securities and Futures Act (Cap. 289), read with
paragraph 6 of the Second Schedule to the Securities and Futures
(Licensing and Conduct of Business) Regulations, from the requirement
to hold a capital markets services licence to carry out the regulated activity
of providing custodial services for securities; and
• a licenced trust company under the Trust Companies Act (Cap. 336).
An Entity described in this Section will be deemed to be a Custodial
Institution without regard to the actual application of the 20% “substantial
portion” test set out in Section 6.3.3 below.
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6.3.3 For purposes of the “substantial portion” test, an Entity holds Financial
Assets for the account of others as a substantial portion of its business if the
Entity’s gross income attributable to the holding of Financial Assets and
related financial services equals or exceeds 20% of the Entity’s gross income
during the shorter of:
• the three-year period that ends on 31 December (or the final day of a non-
calendar year accounting period) prior to the year in which the
determination is being made; or
• the period during which the Entity is in existence.
6.3.4 Income attributable to the holding of Financial Assets and related financial
services includes:
• custody, account maintenance and transfer fees;
• commissions and fees earned from executing pricing securities
transactions with respect to Financial Assets held in custody;
• income earned from extending credit to customers with respect to
Financial Assets held in custody (or acquired through such extension of
credit);
• income earned from contracts for differences and on the bid-ask spread
of Financial Assets;
• fees for providing financial advice with respect to Financial Assets held in
(or potentially to be held in) custody by the Entity; and
• fees for clearance and settlement services
6.3.5 While the term “Financial Asset” does not refer to assets of every kind, it is
intended to encompass any asset that may be held in an account maintained
by an FI with the exception of a non-debt, direct interest in real property and
includes:
• a security (for example, a share of stock in a corporation; partnership or
beneficial ownership interest in a widely held or publicly traded
Partnership or trust; note, bond, debenture or other evidence of
indebtedness);
• partnership interest;
• commodity (but not a commodity that is a physical good, such as wheat);
• swap (for example, interest rate swaps, currency swaps, basis swaps,
interest rate caps, interest rate floors, commodity swaps, equity swaps,
equity index swaps and similar arrangements);
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• Insurance Contract or Annuity Contract; or
• Any interest (including a futures or forward contract or option) in a security,
partnership interest, commodity, swap, Insurance Contract, or Annuity
Contract.
6.3.6 Custodial Institutions could include custodian banks, brokers (i.e., trading
and clearing), central securities depositories, trust companies and nominees.
Insurance brokers or Execution-only brokers that do not hold assets on
behalf of clients will not be a Custodian Institution.
6.3.7 ‘Advisory-only’ distributors may include financial advisors, whose activities
do not go beyond the provision of investment advice to their customers and
/ or acting as an intermediary between the Collective Investment Scheme
(CIS), or fund platform and the customer. Such distributors will not hold legal
title to the assets and therefore are not in the chain of legal ownership of the
CIS. As such, they will not be Custodial Institutions. Such distributors
nevertheless may be asked by other Reporting FIs to provide assistance in
identifying Account Holders and obtaining self-certifications.
6.3.8 A Custodial Institution also does not include an Entity that meets the
requirement of being an Active NFE that is a holding company for a non-
financial group or that provides financing services to such non-financial group
members (Refer to Section 8.5.1 of this e-Tax Guide).
6.4 Depository Institutions
6.4.1 A Depository Institution is an Entity that accepts deposits in the ordinary
course of a banking or similar business.
6.4.2 Under Regulation 6 of the CRS Regulations, a Depository Institution
specifically includes:
• a bank licensed under the Banking Act (Cap. 19);
• a finance company licensed under the Finance Companies Act (Cap. 108);
and
• a merchant bank approved as an FI under the Monetary Authority of
Singapore Act (Cap. 186).
6.4.3 Whether an Entity conducts a banking or similar business is determined
based upon the characteristics of the actual activities of such entity. An Entity
is considered to be engaged in a “banking or similar business” if, in the
ordinary course of its business with customers, the Entity accepts deposits
or other similar investments of funds and regularly engages in one or more
of the following activities:
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• makes personal, mortgage, industrial, or other loans or provides other
extensions of credit;
• purchases, sells, discounts, or negotiates accounts receivable, instalment
obligations, notes, drafts, checks, bills of exchange, acceptances, or other
evidences of indebtedness;
• issues letters of credit and negotiates drafts drawn thereunder;
• provides trust or fiduciary services;
• finances foreign exchange transactions; or
• enters into, purchases, or disposes of finance leases or leased assets.
6.5 Investment Entities
6.5.1 There are 2 types of Investment Entities:
• Type A – An Entity that primarily conducts as a business investment
activities or operations for or on behalf of other persons; or
• Type B – An Entity that derives its gross income from investing,
reinvesting, or trading in Financial Assets, and is managed by an FI
(including a Type A Investment Entity).
6.5.2 Under Regulation 7 of the CRS Regulations, an Investment Entity specifically
includes:
• the holder of a capital markets services licence under the Securities and
Futures Act (cap. 289) to carry out one of the following regulated activities:
a. dealing in securities;
b. trading in futures contracts;
c. leveraged foreign exchange trading;
d. fund management; or
e. real estate investment trust (REIT) management;
• a corporation registered under paragraph 5(7) of the Second Schedule to
the Securities and Futures (Licensing and Conduct of Business)
Regulations (Cap. 289, Rg. 10) as a Registered Fund Management
Company (RFMC);
• a person (other than an individual) that is exempt under section 99(1)(a)
to (d) and (h) of the Securities and Futures Act read with paragraph 2, 3,
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4 or 5 of the Second Schedule to the Securities and Futures (Licensing
and Conduct of Business) Regulations, from the requirement to hold a
capital markets services licence to carry out one or more of the regulated
activities mentioned in (a) – (e) above; and
• a licensed trust company under the Trust Companies Act (Cap. 336).
6.5.3 The definition of an Investment Entity should be interpreted in a manner
consistent with similar language set forth in the definition of ‘Financial
Institution’ in the FATF Recommendations.
6.5.4 An Entity is a Type A Investment Entity when it primarily conducts as a
business one or more of the following activities or operations for or on behalf
of a customer:
• trading in money market instruments (cheques, bills, certificates of
deposit, derivatives, etc.); foreign exchange; exchange, interest rate and
index instruments; transferable securities; or commodity futures trading;
• individual and collective portfolio management; or
• otherwise investing, administering or managing Financial Assets or
money on behalf of other persons.
6.5.5 An Entity will be regarded as primarily conducting the activities described in
Section 6.5.4 above if its gross income from conducting the relevant activities
is at least 50% of its gross income during the shorter of:
• the three-year period ending on 31 December of the year preceding the
tear in which the determination of its status as an Investment Entity is
made; or
• the period in which the Entity has been in existence.
6.5.6 A Type B Investment Entity is defined as an Entity, the gross income of which
is primarily attributable to investing, reinvesting, or trading in Financial Assets,
if the Entity is managed by another Entity that is a Depository Institution, a
Custodial Institution, a Type A Investment Entity or a Specified Insurance
Company.
6.5.7 An Entity’s gross income is primarily attributable to investing, reinvesting or
trading in Financial Assets as described in Section 6.5.6 above if its gross
income from conducting the relevant activities is at least 50% of its gross
income during the shorter of:
• the three-year period ending on 31 December of the year preceding the
year in which the determination of its status as an Investment Entity is
made; or
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23
• the period in which the Entity has been in existence.
6.5.8 An Entity is ‘managed by’ another Entity when the following are met:
• Where the Entity is managed by a mix of FIs, NFEs or individuals, one of
the Entities involved in the management of the Entity is an FI that a
Depository Institution, a Custodial Institution, a Type A Investment Entity
or a Specified Insurance Company;
• The managing FI performs, either directly or through another service
provider, any of the activities described in Section 6.5.4 above on behalf
of the managed Entity; and
• The managing FI has discretionary authority to manage the Entity’s
assets, either in whole or in part.
6.5.9 An Entity is not an Investment Entity in the following situations:
• Where the Entity carries out investment, reinvestment and trading of
Financial Assets for its own account and it is not managed by an FI. Such
an Entity includes a person that is exempt under section 99(1)(h) of the
Securities and Futures Act read with paragraph 2(a) or (e) of the Second
Schedule to the Securities and Futures (Licensing and Conduct of
Business) Regulations, from the requirement to hold a capital markets
services licence, and that carries on the business of dealing in securities
for the person's own account.
• Where the Entity is an Active NFE that meets the criteria for:
a. a holding NFE for a non-financial group or treasury centre that
provides financing and services to members of such non-financial
group;
b. a start-up NFE;
c. an NFE in liquidation or reorganisation; or
d. an NFE that primarily engages in financial and hedging transactions
with, or for, Related Entities that are not FIs;
as described in subparagraph D(9)(d) to (g) of Section VIII of the CRS
and Section 8.5.1 of this e-Tax Guide.
• Where an Entity’s business assets consist solely of non-debt direct
interests in immovable properties even if it is managed by another
Investment Entity. However, where a property fund or REIT uses a
holding company or special purpose vehicle structure to hold immovable
properties for the property fund or REIT, the interest held by the property
fund or REIT in the holding company or special purpose vehicle structure
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24
is a Financial Asset, and the gross income derived from that interest is to
be taken into account to determine whether the property fund or REIT will
meet the definition of a Type A or Type B Investment Entity.
6.6 Collective Investment Schemes (CIS)
6.6.1 Subject to Regulation 7 of the CRS Regulations, any Entity that is treated as
a qualifying CIS will fall under the category of an Investment Entity and in
turn will be regarded as a Reporting SGFI.
6.6.2 For the purpose of the CRS Regulations, a CIS has the same meaning given
to it in the Securities and Futures Act (Cap. 289).
6.6.3 A CIS constituted in Singapore will fall within the scope of the CRS
Regulations and will be subject to due diligence and reporting obligations. A
CIS constituted in Singapore means:
• where the CIS is incorporated as a company, a Singapore incorporated
company; or
• where the CIS is constituted as a unit trust, a CIS whose trust deed is
subject to Singapore laws and whose trustee is located in Singapore.
6.6.4 To the extent that the Equity and Debt Interests of the CIS comprise entirely
of interests which are regularly traded on an established securities market
and the interests in the CIS are registered with the CSD, the CIS does not
need to identify and report on accounts held by Reportable Persons as the
respective custodians will comply with these requirements. For direct CSD
accounts, the custodian will be the CSD. For indirect accounts, where
interests in the CIS are recorded in the CSD through an intermediary FI (for
e.g. fund nominee), the custodian will generally be the intermediary FI.
6.6.5 Similarly, for non-publicly traded CIS, the fund would only need to identify
any direct individual Account Holders and the FIs that appear on its share
register. In turn, FIs that act as fund distributors would be required to identify
and report on their direct Account Holders.
6.6.6 The fund manager of the fund will be responsible for compliance with the
CRS obligations in relation to the Financial Accounts of the fund. The fund
manager may appoint service providers to fulfil its CRS due diligence and
reporting obligations as the service providers will have the necessary records,
for example, in the case where the fund manager uses service providers to
provide fund administration, such as the maintaining of records of investors.
As the CRS obligations remain the responsibility of the fund, the fund
manager and the service provider should have an arrangement to exchange
the necessary information such that the fund manager’s CRS due diligence
and reporting obligations in relation to the fund are fulfilled.
6.7 Fund Distributors
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6.7.1 Fund distributors may include:
• financial advisors;
• fund platforms;
• wealth managers;
• brokers (including execution-only brokers);
• banks; and
• members of an Insurance group.
6.7.2 There are two types of fund distributors for CRS purposes:
• those that act as an intermediary in holding the legal title to the Collective
Investment Scheme (CIS); and
• those that act on an advisory-only basis (Refer to Section 6.3.7 above).
6.7.3 Where an investor appears on a CIS’ register, the CIS is responsible for
undertaking the CRS due diligence and reporting obligations in respect of
that investor. Where a fund distributor appears on a CIS’ register on behalf
of their customers as nominees, the fund distributor is responsible for
undertaking the CRS due diligence and reporting obligations on their
customers’ accounts.
6.7.4 A Singapore fund distributor may have a ‘mixed business’ (i.e., it acts as an
advisor or ‘pure intermediary’ between the investor and the underlying SGFI
(such as a CIS)) on behalf of some customers. In addition, it also holds legal
title to CIS interests on behalf of other customers. In the case where legal
title to the CIS interests is held on behalf of a customer, the fund distributor
will be an FI which will be responsible for undertaking the CRS due diligence
and reporting obligations in respect of those interests.
6.8 Central Securities Depository (CSD)
6.8.1 Where the participants of the Singapore securities settlement system hold
interests recorded in a CSD directly, i.e., ‘Direct CSD Accounts’, the CSD will
be treated as maintaining the Financial Accounts and is responsible for
undertaking the CRS due diligence and reporting obligations.
6.8.2 Notwithstanding the foregoing, a CSD shall not be obligated to report
information with respect to paragraph (A)(5)(b) of Section I of the CRS (i.e.,
related to the total gross proceeds from the sale or redemption of Financial
Assets held in such a Direct CSD Account). The reporting of the gross
Common Reporting Standard
26
proceeds would be undertaken by other Reporting SGFIs such as brokerage
firms holding the dealings account(s) that is linked to the CDP account.
6.8.3 Conversely, where the participants of the Singapore securities settlement
system hold interests recorded in a CSD through third party Reporting SGFIs
(such as depository agents or custodians), the CDP would not have visibility
over the identities of the beneficial owners of these nominee accounts and
will not be treated as maintaining the Financial Accounts. The Reporting
SGFIs that maintain such Financial Accounts will be responsible for
undertaking the CRS due diligence and reporting obligations.
6.9 Central Counterparty Clearing House (CCP)
6.9.1 A CCP will not be treated as maintaining Financial Accounts. With respect to
the clearing of securities and derivatives through a Singapore CCP, the
clearing account held by an SGFI (who is a member of the CCP) with the
CCP (or FIs designated by the CCP) does not constitute a Financial Account.
Accordingly, the CCP is not required to undertake any due diligence and
reporting in connection with the relationship or such clearing activities. It is
the SGFI (who is a member of the CCP) that maintains the Financial
Accounts, which is responsible for undertaking the CRS due diligence and
reporting obligations.
6.10 Trusts
6.10.1 Trusts can be either FIs or NFEs. Where a trust meets one of the criteria to
be an FI, it will most likely be an Investment Entity but it may, alternatively,
meet the requirements of a Custodial Institution.
6.10.2 Most trusts are likely to be managed (Type B) Investment Entities (Refer to
Section 6.5.6 above) as they would generally satisfy both tests within this
category of FI, that is, the trust’s gross income must be primarily derived from
investing, reinvesting or trading in Financial Assets, and the trust must be
managed by an FI (Refer to Sections 6.5.7 and 6.5.8 above). Trusts are
generally regarded as managed by an FI where either one or more trustees
is an FI, or the trustees have appointed an FI to manage the trust assets.
6.10.3 There are some situations, however, in which a trust may fall within the scope
of a Custodial Institution. For example, shares held in a trust may be a
Custodial Account and therefore subject to reporting by the trust as a
Custodial Institution that maintains the account. This may be the case where
an employee share scheme continues to hold Financial Assets, such as
shares, for an employee after they have been granted. Conversely, where
an employee share scheme holds shares for the future benefit of employees,
but the shares are not allocated, then under most circumstances this right to
a future allocation would not be a Custodial Account. Similarly, when shares
are allocated and the trustee is directed to transfer the assets as soon as
reasonably possible to the beneficiary, a broker, a custodian, etc., then the
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trust will not be treated as maintaining a Financial Account for the duration
of the time it takes to complete the transfer.
6.10.4 Where the trustees of a trust are individuals (and therefore not FIs) and the
trust’s only asset is a Depository Account with an FI, and that FI does not
have discretion to manage the account or the funds in the account, the trust
will not be an Investment Entity.
6.10.5 An NFE can be either an Active NFE or a Passive NFE depending on its
activities (Refer to Section 8 below). In the case of a trust that is classified as
a Passive NFE, the Reporting SGFI which maintains a Financial Account of
the trust must determine and identify whether the Controlling Persons of the
trust are Reportable Persons. The definition of Controlling Persons, in such
cases, refers to the settlor(s), the trustee(s), the protector (if any), the
beneficiaries or class of beneficiaries, and any other natural person
exercising ultimate effective control over the trust. The settlor(s), the
trustee(s), the protector (if any), the beneficiaries or class of beneficiaries
must always be treated as Controlling Persons of the trust, regardless of
whether or not any of them exercises control over the trust. In addition, any
other natural person(s) exercising ultimate effective control over the trust
(including through a chain of control or ownership) must also be treated as a
Controlling Person of the trust.
6.11 Personal Investment Companies
6.11.1 Personal Investment Companies (PICs) will need to consider whether they
are within the definition of Investment Entity. Similar to the treatment of trusts,
where a PIC’s gross income is primarily derived from investing, reinvesting
or trading in Financial Assets and the PIC is managed by an FI (Refer to
Section 6.5.6 above), it will be a Type B Investment Entity.
6.12 Specified Insurance Companies
6.12.1 A Specified Insurance Company is any Entity that is an insurance company
(or the holding company of an insurance company) that issues, or is
obligated to make payments with respect to a Cash Value Insurance Contract
or an Annuity Contract and includes a licensed insurer under the Insurance
Act (Cap. 142) that issues, or is obligated to make payments with respect to,
one or more Cash Value Insurance Contracts or Annuity Contracts.
6.12.2 A Cash Value Insurance Contract means an Insurance Contract (other than
an indemnity reinsurance contract between two insurance companies) that
has a Cash Value.
6.12.3 The term 'Cash Value' means the greater of (i) the amount that the
policyholder is entitled to receive upon surrender or termination of the
contract (determined without reduction for any surrender charge or policy
loan); and (ii) the amount the policyholder can borrow under or with regard
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to (for example, pledging as collateral) the contract. (Refer to Section 9.5.2
of this e-Tax Guide for more details on “Cash Value”)
6.12.4 An Annuity Contract means a contract under which the issuer agrees to make
payments for a period of time determined in whole or in part by reference to
the life expectancy of one or more individuals.
6.12.5 An insurance company that issues only general insurance or term life
insurance policies will not be a Specified Insurance Company and therefore
will not be treated as an SGFI, but instead will be an NFE.
6.12.6 An insurance broker that sells Cash Value Insurance Contracts or Annuity
Contracts on behalf of insurance companies is part of the payment chain and
will not be a Specified Insurance Company unless it is obliged to make
payments to the Account Holder under the terms of the Cash Value
Insurance Contract or Annuity Contract.
7 Non-Reporting Financial Institutions
7.1 A Non-Reporting FI means any FI that is:
a Governmental Entity, International Organisation or Central Bank,
other than with respect to a payment that is derived from an obligation
held in connection with a commercial financial activity of a type engaged
in by a Specified Insurance Company, Custodial Institution or
Depository Institution;
a Broad Participation Retirement Fund; a Narrow Participation
Retirement Fund; a Pension Fund of a Governmental Entity, an
International Organisation or Central Bank; or a Qualified Credit Card
Issuer;
any other entity that presents a low risk of being used to evade tax, has
substantially similar characteristics to any of the entities described in
the bullet points above, and is defined in domestic law as a Non-
Reporting FI, provided that the status of such entity as a Non-Reporting
FI does not frustrate the purposes of CRS;
an Exempt Collective Investment Vehicle (CIV); or
a trust to the extent that the trustee of the trust is a Reporting FI and
reports all information required to be reported, with respect to all
Reportable Accounts of the trust.
7.2 Regulation 10 of the CRS Regulations provides the specific requirements for
an SGFI to qualify as a Non-Reporting FI, in particular the special
requirements for an Exempt CIV as described in Section 7.11 below.
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7.3 Non-Reporting SGFIs described in Paragraph B of Section VIII of the CRS
are not required to undertake CRS due diligence and reporting requirements,
nor register with IRAS, unless the IRAS has specified otherwise.
7.4 Governmental Entities
7.4.1 Governmental entities include but are not limited to the following:
• the Government;
• every Organ of State;
• every entity that is wholly owned (whether directly or indirectly) and wholly
controlled by the Minister for Finance (in his corporate capacity), including
GIC Private Limited, GIC (Realty) Pte. Ltd., GIC (Ventures) Pte. Ltd., and
their wholly owned subsidiaries;
• every statutory body (i.e. any authority established by or under any public
Act and whose income is exempt from tax by reason of section 13(1)(e)
of the Act, and includes a Town Council established under the Town
Councils Act (Cap. 329A)); and
• every entity that is wholly owned (whether directly or indirectly) and wholly
controlled by a statutory body.
7.5 International Organisations
7.5.1 The term “International Organisation” means any International Organisation
or wholly owned agency or instrumentality thereof, such as the International
Monetary Fund and the World Bank.
7.6 Central Bank
7.6.1 In Singapore, this refers to the Monetary Authority of Singapore established
under section 3 of the Monetary Authority of Singapore Act (Cap. 186).
7.7 Broad Participation Retirement Fund
7.7.1 A fund established in Singapore to provide retirement, disability, or death
benefits, or any combination thereof, to beneficiaries that are current or
former employees (or persons designated by such employees) of one or
more employers in consideration for services rendered, provided that the
fund:
• does not have a single beneficiary with a right to more than 5% of the
fund’s assets;
• is regulated by the government and provides information reporting about
its beneficiaries to IRAS; and
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• satisfies at least one of the following requirements:
a. the fund is generally exempt from tax on investment income, or
taxation of such income is deferred or taxed at a reduced rate in
Singapore, due to its status as a retirement or pension plan;
b. the fund receives at least 50% of its total contributions (other than
transfers of assets from other plans described as Broad Participation
Retirement Funds, Narrow Participation Retirement Funds or
Pension Funds of a Governmental Entity, International Organisation
or Central Bank or Retirement and Pension Accounts described
under Section 10.2) from the sponsoring employers;
c. distributions or withdrawals from the fund are allowed only upon the
occurrence of specified events related to retirement, disability, or
death (except rollover distributions to other funds described as Broad
Participation Retirement Funds of a Governmental Entity,
International Organisation or Central Bank or Retirement and
Pension Accounts described under Section 10.2), or penalties apply
to distributions or withdrawals made before such specified events; or
d. contributions (other than certain permitted make-up contributions) by
employees to the fund are limited by reference to earned income of
the employee or may not exceed US$50,000 annually, applying the
rules set forth in paragraph C of Section VII of the CRS for account
aggregation and currency translation.
7.8 Narrow Participation Retirement Fund
7.8.1 A fund established in Singapore to provide retirement, disability, or death
benefits to beneficiaries that are current or former employees (or persons
designated by such employees) of one or more employers in consideration
for services rendered, provided that:
• the fund has fewer than 50 participants;
• the fund is sponsored by one or more employers that are not Investment
Entities nor Passive NFEs;
• the employee and employer contributions to the fund (other than transfers
of assets from Retirement and Pension Accounts described under
Section 10.2) are limited by reference to earned income and
compensation of the employee, respectively;
• participants that are not residents of Singapore are not entitled to more
than 20% of the fund’s assets; and
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• the fund is subject to government regulations and provides information
reporting about its beneficiaries to IRAS.
7.9 Pension Fund of a Governmental Entity, International Organisation or
Central Bank
7.9.1 A fund established in Singapore by a Governmental Entity, International
Organisation or Central Bank to provide retirement, disability, or death
benefits to beneficiaries or participants that are current or former employees
of the Governmental Entity, International Organisation or Central Bank (or
persons designated by such employees), or that are not current or former
employees, if the benefits provided to such beneficiaries or participants are
in consideration of personal services performed for the Governmental Entity,
International Organisation or Central Bank.
7.10 Qualified Credit Card Issuers
7.10.1 A Qualified Credit Card Issuer is treated as a Non-Reporting SGFI if it meets
the following requirements:
• it is an SGFI solely because it is an issuer of credit cards that accepts
deposits only when a customer makes a payment in excess of a balance
due with respect to the credit card account and overpayment is not
immediately returned to the customer; and
• it implements policies and procedures (beginning on or before 1 January
2017) either to prevent a customer from making an overpayment in
excess of US$50,000 or to ensure that any customer overpayment in
excess of US$50,000 is refunded to the customer within 60 days, in each
case applying the rules set forth in paragraph C of Section VII of the CRS
for account aggregation and currency translation. For this purpose, a
customer overpayment does not refer to credit balances to the extent of
disputed charges but does include credit balances resulting from
merchandise returns.
7.11 Exempt Collective Investment Vehicle
7.11.1 An Exempt CIV is an Investment Entity that is regulated as a CIV, provided
that all of the interests in the CIV are held by or through individuals or Entities
that are not Reportable Persons and / or Passive NFEs with Controlling
Person(s) who are not Reportable Persons.
7.11.2 Pursuant to Regulation 10(2) of the CRS Regulations, an Exempt CIV must
satisfy all of the following requirements:
• the Investment Entity is constituted in Singapore as a CIS:
a. that is authorised under section 286(1) of the Securities and Futures
Act (Cap. 289); or
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b. the units of which are or are to be the subject of an offer or intended
offer to which Subdivisions (2) and (3) of Division 2 of Part XIII of that
Act do not apply, or apply with modifications by reason of section 304
or 305 of that Act;
• all the interests in the Investment Entity are held by or through:
a. one or more individuals or Entities who are not Reportable Persons;
b. one or more entities that are Passive NFEs and do not have any
Controlling Person(s) who are Reportable Persons; or
c. a combination of individuals and Entities mentioned in (a) and (b)
above.
7.11.3 An Investment Entity that is a CIV that has issued any physical shares in
bearer form (called in this paragraph ‘bearer shares’) qualifies as an Exempt
CIV if, and only if:
• the bearer shares were issued before 1 January 2017; and
• the Investment Entity has in place policies and procedures to:
a. cancel any bearer shares upon surrender of such shares to the
Investment Entity;
b. perform the due diligence procedures set out in Sections II to VII of
the CRS with respect to any bearer shares when such shares are
presented for redemption or other payments;
c. report to the Comptroller any information required to be reported by
a Reporting SGFI under Regulation 16(1) of the CRS Regulations
with respect to any bearer shares when such shares are presented
for redemption or other payments; and
d. ensure that all bearer shares issued by it are redeemed or cancelled
as soon as possible, and in any event prior to 1 January 2018.
7.12 For the purposes of the CRS Regulations, Temasek Holdings (Private)
Limited and each special purpose vehicle wholly owned (whether directly or
indirectly) by it are Non-Reporting SGFIs.
8 Non-Financial Entities (NFEs)
8.1 An NFE refers to any Entity that is not an FI. There are two categories of
NFEs:
Active NFEs; and
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Passive NFEs.
8.2 An NFE, whether Active or Passive, has no reporting obligation to IRAS.
However, the Entity is required to determine its classification and, when
requested, to produce Documentary Evidence for Reporting FIs to certify its
classification. A Passive NFE would also be required to identify its
Controlling Person(s) and provide to its FI a self-certification relating to each
Controlling Person’s tax residence(s).
8.3 Reporting SGFIs must report Financial Accounts that are held by Passive
NFEs with Controlling Person(s) that are Reportable Persons.
8.4 Passive NFEs
8.4.1 A Passive NFE is any NFE that is:
not an Active NFE; or
a professionally managed (Type B) Investment Entity that is not a
Participating Jurisdiction FI (i.e., an Investment Entity that is resident in
a non-Participating Jurisdiction).
8.5 Active NFEs
8.5.1 An Active NFE refers to any NFE that meets any of the following criteria:
• less than 50% of the NFE’s gross income from the preceding calendar
year or other appropriate reporting period (such as an Entity’s financial
reporting year) is Passive Income (Refer to Section 8.6 below on “Passive
Income”) and less than 50% of the assets held by the NFE during the
preceding calendar year or other appropriate reporting period are assets
that produce or are held for the production of passive income;
• the shares of the NFE are regularly traded on an established securities
market or the NFE is a Related Entity of an Entity, the shares of which are
regularly traded on an established securities market;
• the NFE is a Governmental Entity, an International Organisation, a
Central Bank or an Entity wholly-owned by one or more of the foregoing;
• substantially all of the activities of the NFE consist of holding (in whole or
in part) the outstanding shares of, or providing financing and services to,
one or more subsidiaries that engage in trades or businesses other than
the business of an FI, except that an entity shall not qualify for NFE status
if the Entity functions (or holds itself out) as an investment fund, such as
a private equity fund, venture capital fund, leveraged buyout fund, or any
investment vehicle whose purpose is to acquire or fund companies and
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then hold interest in those companies as capital assets for investment
purposes;
• the NFE is not yet operating a business and has no prior operating history,
but is investing capital into assets with the intent to operate a business
other than that of an FI, provided that the NFE shall not qualify for this
exemption after the date that is 24 months after the date of the initial
incorporation/organisation of the NFE;
• the NFE was not an FI in the past five years; and is in the process of
liquidating its assets or is reorganising with the intent to continue or
recommence operations in a business other than that of an FI;
• the NFE primarily engages in financing and hedging transactions with, or
for, Related Entities that are not FIs, and does not provide financing or
hedging services to any Entity that is not a Related Entity, provided that
the group of any such Related Entities is primarily engaged in a business
other than that of an FI; or
• the NFE meets all of the following requirements:
a. it is established and operated in its jurisdiction of residence
exclusively for religious, charitable, scientific, artistic, cultural, athletic,
or educational purposes; or it is established and operated in its
jurisdiction of residence and it is a professional organisation,
business league, chamber of commerce, labour organisation,
agricultural or horticultural organisation, civic league or an
organisation operated exclusively for the promotion of social welfare;
b. it is exempt from income tax in its jurisdiction of residence;
c. it has no shareholders or members who have a proprietary or
beneficial interest in its income or assets;
d. the applicable laws of the NFE’s jurisdiction of residence or the NFE’s
formation documents do not permit any income or assets of the NFE
to be distributed to, or applied for the benefit of, a private person or
non-charitable entity other than pursuant to the conduct of the NFE’s
charitable activities, or as payment of reasonable compensation for
services rendered, or as payment representing the fair market value
of property which the NFE has purchased; and
e. the applicable laws of the NFE’s jurisdiction of residence or the NFE’s
formation documents require that, upon the NFE’s liquidation or
dissolution, all of its assets be distributed to a Governmental Entity
or other non-profit organisation, or escheat to the government of the
NFE’s jurisdiction of residence or any political subdivision thereof.
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8.5.2 All Charities registered under the Charities Act (Cap. 37) are Active NFEs.
8.6 Passive Income
8.6.1 Passive income, for purposes of determining whether an entity is an Active
NFE rather than a Passive NFE, means the portion of gross income that
consists of:
• dividends, including substitute dividend amounts;
• interest;
• income equivalent to interest, including substitute interest;
• rents and royalties, other than rents and royalties derived in the active
conduct of a trade or business conducted, at least in part, by the
employees of the NFE;
• annuities;
• the excess of gains over losses from the sale or exchange of Financial
Assets that gives rise to the passive income described previously;
• the excess of gains over losses from transactions (including futures,
forwards, options, and similar transactions) in any Financial Assets;
• the excess of foreign currency gains over foreign currency losses;
• net income from swaps; or
• amounts received under Cash Value Insurance Contracts.
8.6.2 However, passive income does not include, in the case of an NFE that
regularly acts as a dealer in Financial Assets, any income from any
transaction entered into, in the ordinary course of such dealer’s business as
such a dealer.
8.6.3 For the purposes of determining the assets held for the production of passive
income, the assets are not required to produce income in the period under
review. Hence, for example, cash should be viewed as producing or being
held for the production of passive income (i.e., interest) even if it does not
actually produce such income.
9 Financial Accounts
9.1 Introduction
9.1.1 A Financial Account is an account maintained by a Reporting SGFI that falls
into one of five principal categories:
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• Depository Accounts (Refer to Section 9.2 below);
• Custodial Accounts (Refer to Section 9.3 below);
• Equity and Debt Interests in a Financial Institution (Refer to Section 9.4
below);
• Cash Value Insurance Contracts (Refer to Section 9.5 below); and
• Annuity Contracts (Refer to Section 9.6 below).
9.1.2 The term Financial Account does not include any account that is an Excluded
Account, i.e. an account that has been excluded from the definition of
Financial Account as described in subparagraph (C)(17) of Section VIII of the
CRS, as modified by Regulation 11 of the CRS Regulations. Such Excluded
Accounts are detailed in Section 10 of this e-Tax Guide.
9.1.3 Reporting SGFIs must:
• Review the accounts they maintain to determine if they fall into one of the
five categories listed in Section 9.1.1 above; and
• Identify if the Account Holder of these Financial Accounts are either
Reportable Persons or Passive NFEs with one or more Controlling
Person(s) who are Reportable Persons by applying the CRS due
diligence procedures; and
9.1.4 On an annual basis, Reporting SGFIs must provide information to IRAS in
relation to the Financial Accounts that are held by Reportable Persons.
9.2 Depository Accounts
9.2.1 A Depository Account includes any commercial, checking, savings, time or
thrift account, or an account that is evidenced by a certificate of deposit, thrift
certificate, investment certificate, certificate of indebtedness, or other similar
instrument maintained by an FI in the ordinary course of a banking or similar
business. A Depository Account also includes an amount held by an
insurance company pursuant to a guaranteed investment contract or similar
agreement to pay or credit interest thereon.
9.2.2 The account does not have to be an interest bearing account. A Depository
Account will include any credit balance on a credit card (a credit balance
does not include credit balances in relation to disputed charges, but does
include credit balances resulting from refunds of purchases) issued by a
credit card company engaged in banking or similar business. However, credit
cards will not be considered to be Depository Accounts where the issuer
meets the requirements to be deemed as a Qualified Credit Card Issuer
(Refer to Section 7.10 of this e-Tax Guide).
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9.2.3 A Reporting SGFI that does not satisfy the requirement to be a Qualified
Credit Card Issuer, but accepts deposits when a customer makes a payment
in excess of a balance due with respect to a credit card account or revolving
credit facility need not report the account where the account qualifies as an
Excluded Account that is detailed in Section 10.8 of this e-Tax Guide.
9.3 Custodial Accounts
9.3.1 A Custodial Account means an account (other than an Insurance Contract or
Annuity Contract) that holds one or more Financial Assets for the benefit of
another person. (Refer to Section 6.3.5 above on Financial Assets)
9.3.2 Where an FI is acting as an executing broker, and simply executing trading
instructions, or receiving and transmitting such instructions to another
executing broker (either through the Singapore Exchange (SGX), multilateral
trading facility or equivalent of such, a clearing organisation or on a bilateral
basis) then the FI will not be required to treat the facilities established for the
purposes of executing a trading instruction, or receiving and transmitting
such instructions, as a Financial Account. In these cases, the FI acting as
custodian will be responsible for performing the due diligence procedures
and reporting, where necessary.
9.4 An Equity or Debt Interest in a Financial Institution
9.4.1 Any Debt or Equity Interest in an Investment Entity will constitute Financial
Accounts. However, Equity or Debt Interests in an Entity that is an
Investment Entity solely because it is an investment advisor, or an
investment manager, are not Financial Accounts. Thus, Equity or Debt
Interests that would generally be considered Financial Accounts include
Equity or Debt Interests in an Investment Entity (i) that is a professionally
managed (Type B) Investment Entity, or (ii) that functions or holds itself out
as a CIV, mutual fund, exchange traded fund, private equity fund, hedge fund,
venture capital fund, leveraged buyout fund, or any similar investment vehicle
established with an investment strategy of investing, reinvesting, or trading
in Financial Assets.
9.4.2 An “Equity Interest” is defined in subparagraph (C)(4) of Section VIII of the
CRS. In the case of a Partnership that is an FI, the term Equity Interest
means either a capital or profits interest in the Partnership.
9.4.3 In the case of a trust that is an FI, an Equity Interest means an interest held
by any person treated as a settlor or beneficiary of all or a portion of the trust,
or any other natural person exercising ultimate effective control over the trust.
The reference to any other natural person exercising ultimate effective
control over the trust, at a minimum, will include the trustee as an Equity
Interest Holder. Further, a discretionary beneficiary will only be treated as an
Account Holder in the years in which it receives a distribution from the trust.
If a settlor, beneficiary or other person exercising ultimate effective control
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over the trust is itself an Entity, that Entity must be looked through, and the
ultimate natural Controlling Person(s) behind that Entity must be treated as
the Equity Interest Holder. This look through obligation should correspond to
the obligation to identify the beneficial owner of a trust under AML / KYC
procedures which are consistent with Recommendations 10 and 25 of the
2012 FATF Recommendations.
9.4.4 A “Debt Interest” refers to any interest created when a lender lends to a
borrower, which can arise from arrangements such as simple loan, bond
issue or note issue.
9.4.5 Debt or Equity Interests maintained by Depository Institutions, Custodial
Institutions, Investment Entity (other than an investment advisor or an
investment manager), and Specified Insurance Companies constitute
Financial Accounts if the class of interests was established for the avoidance
of reporting under CRS.
9.5 Cash Value Insurance Contracts
9.5.1 A Cash Value Insurance Contract means an Insurance Contract (other than
(i) an indemnity reinsurance contract between two insurance companies and
(ii) a Term Life Insurance Contract) that has a cash value.
9.5.2 Cash Value
• The term “Cash Value” means the greater of:
a. the amount that the policyholder is entitled to receive upon surrender,
termination, cancellation, or withdrawal (determined without
reduction for any surrender charge or policy loan); and
b. the amount the policyholder can borrow under or with regard to the
contract (e.g., by pledging as collateral).
• “Cash Value” does not include an amount payable under an Insurance
Contract:
a. solely by reason of the death of an individual insured under a life
insurance contact;
b. as a personal injury or sickness benefit or other benefit providing
indemnification of an economic loss incurred upon the occurrence of
the event insured against;
c. as a refund to the policyholder of a previously paid premium (less
cost of insurance charges whether or not actually imposed) under an
Insurance Contract (other than an investment-linked life insurance or
annuity contract) due to cancellation or termination of the contract,
decrease in risk exposure during the effective period of the contract,
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or arising from the correction of a posting or similar error with regard
to the premium for the contract;
d. as a policyholder dividend (other than a termination dividend)
provided that the dividend relates to an Insurance Contract under
which the only benefits payable are described in subparagraph b. of
the 2nd bullet point above; or
e. as a return of an advance premium or premium deposit for an
Insurance Contract for which the premium is payable at least
annually if the amount of the advance premium or premium deposit
does not exceed the next annual premium that will be payable under
the contract.
9.6 Annuity Contracts
9.6.1 An Annuity Contract is a contract under which:
• the issuer agrees to make payments for a period of time determined in
whole or in part by reference to the life expectancy of one or more
individuals; or
• a contract that is considered to be an Annuity Contract in accordance with
the law, regulation or practice of Singapore in which the contract was
issued and under which the issuer agrees to make payments for a term
of years.
10 Excluded Accounts
10.1 Excluded Accounts are accounts that have been excluded from the definition
of a Financial Account, and are described in subparagraph (C)(17) of Section
VIII of the CRS, as modified by Regulation 11(2) of the CRS Regulations.
These accounts are seen to present a low risk of being used for tax evasion.
Please refer to Sections 10.2 to 10.9 for an overview of these accounts.
10.2 Retirement and Pension Accounts
10.2.1 This refers to a retirement or pension account maintained in Singapore that
satisfies the following requirements under the laws of Singapore:
• the account is subject to regulation as a personal retirement account or is
part of a registered or regulated retirement or pension plan for the
provision of retirement or pension benefits (including disability or death
benefits);
• the account is tax-favoured (i.e., contributions to the account that would
otherwise be subject to tax in Singapore, are deductible or excluded from
the gross income of the Account Holder or taxed at a reduced rate, or
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taxation of investment income from the account is deferred or taxed at a
reduced rate);
• annual information reporting is required to IRAS with respect to the
account;
• withdrawals are conditioned on reaching a specified retirement age,
disability, or death, or penalties apply to withdrawals made before such
specified events; and
• either (i) annual contributions are limited to US$50,000 or less, or (ii) there
is a maximum lifetime contribution limit to the account of US$1,000,000
or less, in each case applying the rules set forth in paragraph C of Section
VII of the CRS for account aggregation and currency translation. (Refer
to Section 11.8.2 below for details on the rules)
10.3 Non-Retirement Savings Accounts
10.3.1 This refers to an account maintained in Singapore (other than an Insurance
or Annuity Contract) that satisfies the following requirements under the laws
of Singapore:
• the account is subject to regulation as an investment vehicle for purposes
other than for retirement and is regularly traded on an established
securities market, or the account is subject to regulation as a savings
vehicle for purposes other than for retirement;
• the account is tax-favoured (i.e., contributions to the account that would
otherwise be subject to tax in Singapore, are deductible or excluded from
the gross income of the Account Holder or taxed at a reduced rate, or
taxation of investment income from the account is deferred or taxed at a
reduced rate);
• withdrawals are conditioned on meeting specific criteria related to the
purpose of the investment or savings account (for example, the provision
of educational or medical benefits), or penalties apply to withdrawals
made before such criteria are met; and
• annual contributions are limited to US$50,000 or less, applying the rules
set forth in paragraph C of Section VII of the CRS for account aggregation
and currency translation. (Refer to Section 11.8.2 below for details on the
rules)
10.4 Other Excluded Accounts
10.4.1 Excluded Accounts also include:
• Edusave accounts and PSE accounts;
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• Child Development Accounts (CDAs);
• Central Provident Fund (CPF) Investment Accounts where the accounts
are subject to regulation under the CPF Act, in accordance with CPF
(Investment Schemes) Regulations.
10.4.2 For the avoidance of doubt, Supplementary Retirement Scheme (SRS)
accounts and SRS investment accounts are not Excluded Accounts.
10.5 Term Life Insurance Contracts
10.5.1 This refers to a life insurance contract with a coverage period that will end
before the insured individual attains age 90, provided that the contract
satisfies the following requirements:
• the periodic premiums, which do not decrease over time, are payable at
least annually during the period the contract is in existence or until the
insured attains age 90, whichever is shorter;
• the contract has no contract value that any person can access (by
withdrawal, loan or otherwise) without terminating the contract;
• the amount (other than a death benefit) payable upon cancellation or
termination of the contract cannot exceed the aggregate premiums paid
for the contract, less the sum of mortality, morbidity and expense charges
(whether or not actually imposed) for the period or periods of the
contract’s existence and any amounts paid prior to the cancellation or
termination of the contract; and
• the contract is not held by a transferee for value.
10.6 Accounts of Deceased Persons / Estates
10.6.1 An account that is held solely by an estate will not be a Financial Account
where the Reporting SGFI that maintains the account has received and is in
possession of a formal notification of the Account Holder’s death (e.g., a copy
of the deceased’s death certificate) or a copy of the deceased’s will.
10.7 Intermediary Accounts (Escrow Accounts)
10.7.1 Accounts where money is held by a Reporting SGFI on behalf of transacting
parties (i.e. escrow accounts) and established in connection with any of the
following, will not be considered Financial Accounts:
• A court order, judgement or other legal matter on which the non-financial
intermediary is acting on behalf of their underlying client.
• A sale, exchange, or lease of real or personal property, provided that the
account satisfies all of the following requirements:
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a. the account is funded solely with a down payment, earnest money,
deposit in an amount appropriate to secure an obligation directly
related to the transaction, or a similar payment, or is funded with a
Financial Asset that is deposited in the account in connection with
the sale, exchange, or lease of the property;
b. the account is established and used solely to secure the obligation of
the purchaser to pay the purchase price for the property, the seller to
pay any contingent liability, or the lessor or lessee to pay for any
damages relating to the leased property as agreed under the lease;
c. the assets of the account, including the income earned thereon, will
be paid or otherwise distributed for the benefit of the purchaser, seller,
lessor, or lessee (including to satisfy such person’s obligation) when
the property is sold, exchanged, or surrendered, or the lease
terminates;
d. the account is not a margin or similar account established in
connection with a sale or exchange of a Financial Asset; and
e. the account is not associated with an account described in Section
10.8 below.
• An obligation of a Reporting SGFI servicing a loan secured by real
property to set aside a portion of a payment solely to facilitate the payment
of taxes or insurance related to the real property at a later time;
• Any obligation of a Reporting SGFI solely to facilitate the payment of taxes
at a later time.
10.8 Depository Accounts due to not-returned overpayments
10.8.1 A Depository Account that satisfies the following requirements:
• The account exists solely because a customer makes a payment in
excess of a balance due with respect to a credit card or other revolving
credit facility and the overpayment is not immediately returned to the
customer; and
• Beginning on or before 1 January 2017, the Reporting SGFI implements
policies and procedures either to prevent a customer from making an
overpayment in excess of US$50,000, or to ensure that any customer
overpayment in excess of US$50,000 is refunded to the customer within
60 days, in each case applying the rules forth in paragraph C of Section
VII of the CRS for currency translation. (Refer to Section 11.8.2 below for
details on the rules) For this purpose, a customer overpayment does not
refer to credit balances to the extent of disputed charges but does include
credit balances resulting from merchandise returns.
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10.9 Dormant Accounts (with balance or value that does not exceed US$1,000)
10.9.1 A Financial Account (other than an Annuity Contract) is an Excluded Account
if:
• Its balance or value does not exceed US$1,000; and
• It is a dormant account, i.e. the account meets all of the following
conditions:
a. the Account Holder has not initiated a transaction with regard to the
account or any other account held by the Account Holder with the
Reporting SGFI in the previous three years;
b. the Account Holder has not communicated with the Reporting SGFI
with regard to that account or any other account held by the Account
Holder in the previous six years; and
c. Where the account is a Cash Value Insurance Contract, the
Reporting SGFI that maintains the account has not, in the previous
six years, communicated with the Account Holder regarding the
account or any other account held by the Account Holder with the FI.
10.9.2 End of Dormancy
• An account will no longer be dormant if any one of the following conditions
is met:
a. the Account Holder initiates a transaction with regard to the account
or any other account held by the Account Holder with the Reporting
SGFI;
b. the Account Holder communicates with the Reporting SGFI that
maintains such account regarding the account or any other account
held by the Account Holder with the Reporting SGFI; or
c. the account ceases to be a dormant account under applicable laws
or regulations or the Reporting SGFI’s normal operating procedures.
• Depending on when the “reactivated” account was first opened (New or
Preexisting Account) and the Account Holder type (Individual or Entity),
the Reporting SGFI can apply the applicable due diligence procedures
under the CRS Regulations on the “re-activated” account to establish if it
is a Reportable Account by the later of the last day of the calendar year
or 90 calendar days following the date when the account is no longer
dormant. However, if a Preexisting Account is “reactivated” before the due
date (31 Dec 2017 for High Value Accounts; 31 Dec 2018 for Lower Value
Accounts and Preexisting Entity Accounts) for the review of the account,
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the Reporting SGFI will have up to the later of the review due date that is
applicable i.e. either 31 Dec 2017 or 31 Dec 2018, as the case may be,
or 90 calendar days following the date when the account is no longer
dormant to establish if the account is a Reportable Account.
11 Due Diligence Procedures under the CRS
11.1 General
11.1.1 Singapore’s CRS legislation requires and empowers all Reporting SGFIs to
put in place the necessary procedures and systems to establish the tax
residence(s) of all their Account Holders, instead of only for Account Holders
that are tax residents of jurisdictions with which Singapore has a Competent
Authority Agreement (“CAA”) to exchange financial account information.
Reporting SGFIs will apply the “Wider Approach” when conducting CRS due
diligence so that they would not need to repeatedly review the same
accounts to re-establish whether the Financial Accounts they maintain are
Reportable Accounts each time Singapore enters into a new bilateral
exchange relationship with a jurisdiction.
11.1.2 A Reporting SGFI must maintain arrangements for establishing all the tax
residencies for (i) the Account Holder of each Financial Account and (ii)
where the Account Holder is a Passive NFE, each Controlling Person of the
Passive NFE.
11.1.3 In addition, a Reporting SGFI must maintain arrangements to identify
whether a Financial Account is a Reportable Account.
11.1.4 When Account Holders or Controlling Persons of Passive NFEs declare that
they are Singapore tax residents on their self-certifications, Reporting SGFIs
are to obtain the Singapore tax reference number of their Account Holders
or Controlling Persons to substantiate the claim that they are Singapore tax
residents.
11.1.5 The table below provides an overview of the classification of accounts for
CRS purposes and the corresponding sections in this e-Tax Guide that
describe the applicable due diligence procedures:
Relevant Dates
Classification
Due Diligence Procedures
Individual
Entity
Accounts maintained
by Reporting SGFI as
of 31 December 2016
Preexisting Accounts
Section 11.4
Section 11.6
Accounts opened on or
after 1 January 2017
New Accounts
Section 11.5
Section 11.7
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11.1.6 A Reporting SGFI may apply the due diligence procedures for New Accounts
to Preexisting Accounts and apply the due diligence procedures for High
Value Accounts to Lower Value Accounts.
11.1.7 In addition, a Reporting SGFI may treat New Accounts as Preexisting
Accounts when certain conditions are met, as provided in Regulation 15(13)
of the CRS Regulations. A Preexisting Account is hence:
a. a Financial Account maintained by the Reporting SGFI as of 31
December 2016; or
b. any other Financial Account maintained by the Reporting SGFI on or after
1 January 2017 if all of the following conditions are satisfied:
i. as of 31 December 2016, the Account Holder of the Financial
Account has a Financial Account with the Reporting SGFI or a local
entity that is related to the institution;
ii. the Reporting SGFI treats one or more of the Financial Accounts
mentioned in sub‑paragraph (a), of the Account Holder, and all other
Financial Accounts of the Account Holder that are treated as Pre‑
existing Accounts under sub‑paragraph (b) that are maintained by:
(A) the institution; and
(B) all local entities that are related to the institution (if any),
as a single Financial Account for the purpose of determining whether
an amount of any matter mentioned in a prescribed provision in
respect of such single Financial Account, exceeds the maximum
amount specified for that matter in that provision;
iii. the Reporting SGFI does not know and does not have any reason to
believe that any self-certification or Documentary Evidence of the
Financial Account or any of the Financial Accounts treated as a single
Financial Account under subparagraph (ii) Is incorrect or unreliable;
iv. where the Reporting SGFI is required by any written law to perform
AML / KYC procedures on the Financial Account, the institution has
performed the AML / KYC procedures on the Financial Account; and
v. the Reporting SGFI does not require the provision of any new,
additional or amended information by the Account Holder for the
opening of the Financial Account, other than for the purposes of
facilitating the institution’s compliance with its CRS due diligence and
reporting obligations.
11.1.8 In accordance with Regulation 14(5) of the CRS Regulations, the Reporting
SGFI must, in relation to any Financial Account, ensure that all of the
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evidence, record or information obtained as part of its CRS due diligence
procedures for a Financial Account, and a record of the due diligence steps
taken be kept for the specified period below:
• in the case of any evidence, record or information that identifies the
Account Holder of the Financial Account, is a document establishing a
business relation with the Account Holder or is correspondence with the
Account Holder — five years after the closing of the Financial Account or
the end of the business relation (as the case may be);
• in the case of any evidence, record or information relating to any
transaction — five years after 31 December of the calendar year in which
the Reporting SGFI is required to provide any information relating to the
transaction to IRAS; and
• in the case of any record of the steps taken in accordance with Sections
11.1.2 and 11.1.3 above — five years after 31 December of the calendar
year in which the Reporting SGFI is required to provide any information
relating to the Financial Account to IRAS.
11.2 Reportable Accounts
11.2.1 A Financial Account is a Reportable Account if it is maintained by a Reporting
SGFI and held by:
• one or more Reportable Person(s); or
• any Passive NFE with one or more Controlling Person(s) who are
Reportable Persons.
11.2.2 The term “Reportable Person” means a Reportable Jurisdiction Person other
than: (i) a corporation, the stock of which is regularly traded on one or more
established securities markets; (ii) any corporation that is a Related Entity of
a corporation described in (i); (iii) a Governmental Entity; (iv) an International
Organisation; (v) a Central Bank; or (vi) a Financial Institution.
11.2.3 A “Reportable Jurisdiction Person” means an individual or Entity that is
resident in a Reportable Jurisdiction under the tax laws of such jurisdiction,
or an estate of a decedent who was a resident of a Reportable Jurisdiction.
For this purpose, an Entity such as a Partnership, LLP, or similar legal
arrangement that has no residence for tax purposes shall be treated as
resident in the jurisdiction in which its place of effective management is
situated.
11.2.4 A “Reportable Jurisdiction” means a jurisdiction that is published as one on
the IRAS CRS webpage at https://www.iras.gov.sg/IRASHome/CRS/.
11.2.5 CRS due diligence and reporting obligations must be performed by the
Reporting SGFI, or by a third party service provider on behalf of the Reporting
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SGFI, in order to identify and report on the Reportable Accounts maintained
by the Reporting SGFI. The Reporting SGFI remains responsible for the due
diligence and reporting obligations that the third party service provider carries
out on behalf of the Reporting SGFI.
11.3 Identifying the Account Holder of a Financial Account
11.3.1 A Reporting SGFI will need to identify the Account Holder in order to apply
the CRS due diligence procedures to ascertain whether the Financial
Account is a Reportable Account.
11.3.2 An Account Holder is a person listed or identified as the holder or owner of
the account with the Reporting SGFI that maintains the account, even when
the person is a flow-through entity. For instance,
• If a Partnership is listed as the holder of a Financial Account, the
Partnership is the Account Holder, rather than the partners of the
Partnership. Financial Accounts held by Partnerships should be regarded
as entity accounts.
• If a trust or estate is listed as the holder of a Financial Account, the trust
or estate is the Account Holder, rather than its owners or beneficiaries.
The trust will be the Account Holder even if it is the trust’s trustee that
appears listed or recorded as the holder of the Financial Account in the
Reporting SGFI’s system.
11.3.3 A person (X), other than an FI, that holds a Financial Account for the benefit
of another person (Y) as an agent, custodian, nominee, signatory, investment
advisor, or intermediary is not treated as the Account Holder. Instead, the
other person (Y) on whose behalf the account is held, is the Account Holder.
11.3.4 Under the CRS, an account is either held by an Individual or an Entity.
11.3.5 An Individual Account is an account held by a natural person. For the
purposes of the CRS, this includes a sole-proprietorship account where the
sole-proprietorship is owned by an individual.
11.3.6 An Entity Account is one that is held by a legal person or a legal arrangement.
Hence, accounts held by companies, associations, joint ventures,
Partnerships and trusts are regarded as Entity Accounts.
11.3.7 Jointly held accounts
• Where a Financial Account is jointly held, each Joint Account Holder is
treated as an Account Holder for the purposes of determining whether the
account is a Reportable Account.
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• If a Financial Account is jointly held by an individual and an entity, the
Reporting SGFI must apply the due diligence requirements in respect of
the individual and the Entity separately.
• When more than one Reportable Person is a Joint Account Holder, each
Reportable Person will be treated as an Account Holder and will be
attributed the entire balance of the jointly held account, including for
purposes of reporting and applying the aggregation rules set forth in
paragraph C of Section VII of the CRS.
11.3.8 Account Holder for Cash Value Insurance Contracts and Annuity Contracts
• A Cash Value Insurance Contract or Annuity Contract is held by each
person that is entitled to access the Cash Value (e.g., through a loan,
withdrawal, surrender, or otherwise) or to change a beneficiary under the
contract. Where no person can access the Cash Value or change a
beneficiary, the Account Holder is:
a. any person named as the owner in the contract; and
b. any person with a vested entitlement to payment under the terms of
the contract.
• Upon the maturity of a Cash Value Insurance Contract or Annuity Contract
(i.e. when an obligation to pay an amount under the contract becomes
fixed), each person that is entitled to receive a payment under the contract
is treated as an Account Holder.
11.4 Due Diligence for Preexisting Individual Accounts
11.4.1 The following rules and procedures apply for purposes of identifying
Reportable Accounts among Preexisting Accounts held by individuals
(“Preexisting Individual Accounts”).
11.4.2 Paragraph A of Section III of the CRS exempts from review all Preexisting
Individual Accounts that are Cash Value Insurance Contracts and Annuity
Contracts, provided that the Reporting FI is prevented by law from selling
such contracts to residents of a Reportable Jurisdiction. Since Singapore law
contains no such restrictions, this exemption does not apply in Singapore.
11.4.3 Separate due diligence procedures and standards apply for Preexisting
Individual Accounts that are Lower Value Accounts and r those that are High
Value Accounts.
11.4.4 Lower Value Accounts
a. Lower Value Accounts refer to Preexisting Individual Accounts with a
balance or value as of 31 December 2016 that does not exceed
US$1,000,000.
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b. A Reporting SGFI may apply the due diligence procedures set out in
either the “residence address test”, or the electronic record search to
identify Reportable Accounts in respect of Lower Value Accounts.
c. Residence address test
i. If the Reporting SGFI has in its records a current residence address
for the individual Account Holder based on Documentary Evidence,
the Reporting SGFI may treat the individual Account Holder as being
a resident for tax purposes of the jurisdiction in which the address is
located for purposes of determining whether such individual Account
Holder is a Reportable Person.
ii. To rely on the residence address test, the following conditions
(Please refer to paragraphs 9 to 13 of the Commentary on Section III
for details) must be met:
• The Reporting SGFI must have in its records a residence
address for the individual Account Holder;
An “in-care-of” address or a post office address is not a residence
address, unless it clearly identifies the actual residence of the
Account Holder.
• The address must be current;
A residence address is considered to be “current” where it is the
most recent residence address that was recorded by the
Reporting SGFI with respect to the individual Account Holder. A
residence address is not considered to be “current” if it has been
used for mailing purpose and mail has been returned undelivered.
However, a residence address associated with a dormant
account (Refer to 2nd bullet point of Section 10.9.1 on what
constitutes a dormant account under the CRS) would be
considered “current” during the dormancy period.
• Such residence address must be based on Documentary
Evidence.
This requirement is satisfied if the Reporting SGFI has
policies and procedures in place to ensure that the current
residence address in its records is the same address (or
in the same jurisdiction) as that on the Documentary
Evidence. (Refer to Section 11.8.3 below on Documentary
Evidence) This requirement is also met if the Reporting
SGFI’s policies and procedures ensure that where it has
government-issued Documentary Evidence that does not
contain a recent residence address or does not contain an
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address at all, the current residence address in the
Reporting SGFI’s records is the same address, or in the
same jurisdiction, as that on recent documentation issued
by an authorised government body or a utility company.
Acceptable documentation issued by an authorised
government body includes, for example, formal
notifications or assessments by a tax administration.
Acceptable documentation issued by utility companies
relates to supplies linked to a particular property and
includes a bill for water, electricity, telephone (landline
only), gas, or oil. In such circumstances, the standards of
knowledge applicable to Documentary Evidence would
also apply to the documentation relied upon by the
Reporting SGFI. (Refer to Section 11.5.12 below on
standards of knowledge)
iii. Reporting SGFIs can apply the residence address test to all Lower
Value Accounts or, separately, to any clearly identified group of such
accounts.
iv. If the Reporting SGFI has relied on the residence address test and
there is a change in circumstances that causes the Reporting SGFI
to know or have reason to know that the original Documentary
Evidence or other documentation is incorrect or unreliable, the
Reporting SGFI must, by the later of the last day of the relevant
calendar year or other appropriate reporting period, or 90 days
following the notice or discovery of such change in circumstances,
obtain a self-certification and new Documentary Evidence to
establish the tax residence of the Account Holder. If the Reporting
SGFI cannot obtain the self-certification and new Documentary
Evidence by such date, the Reporting SGFI must apply the electronic
record search procedures described in Section 11.4.4.d below.
Please refer to paragraph 13 of the Commentary on Section III for
examples that illustrate the procedures to be followed in case of a
change in circumstances.
d. Electronic record search
i. If the Reporting SGFI does not rely on a current residence address
for the individual Account Holder based on Documentary Evidence,
the Reporting SGFI must review electronically searchable data
maintained by the Reporting SGFI for any of the following indicia:
a) Identification of the Account Holder as a resident of a
jurisdiction outside Singapore (i.e., a Foreign Jurisdiction);
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b) Current mailing or residence address (including a post office
box) in a Foreign Jurisdiction;
c) One or more telephone numbers in a Foreign Jurisdiction and
no telephone number in Singapore;
d) Standing instructions (other than with respect to a Depository
Account) to transfer funds to an account maintained in a
Foreign Jurisdiction;
e) Currently effective power of attorney or signatory authority
granted to a person with an address in a Foreign Jurisdiction;
or
f) a “hold mail” instruction or “in-care-of” address in a Foreign
Jurisdiction if the Reporting SGFI does not have any other
address on file for the Account Holder.
ii. If none of the indicia listed above are discovered in the electronic
record search, then no further action is required until there is a
change in circumstances that results in one or more indicia being
associated with the account, or the account becomes a High Value
Account described in Section 11.4.5 below.
iii. If any of indicia listed in subparagraph (i)(a) to (i)(e) above are
discovered in the electronic record search, or if there is a change in
circumstances that results in one or more indicia being associated
with the account, then the Reporting SGFI must treat the Account
Holder as a resident for tax purposes of each Foreign Jurisdiction for
which an indicium is identified, unless it elects to apply one of the
exceptions to reporting described in Section 11.4.4.e below with
respect to that account.
iv. If a “hold mail” instruction or “in-care-of” address is discovered in the
electronic record search and no other address and none of the other
indicia listed in subparagraph (i)(a) to (i)(e) above are identified for
the Account Holder, the Reporting SGFI must, in the order most
appropriate to the circumstances, apply the paper record search
described in Section 11.4.5.d below, or seek to obtain from the
Account Holder a self-certification or Documentary Evidence to
establish the residence(s) for tax purposes of such Account Holder.
If the paper record search fails to establish an indicium and the
attempt to obtain the self-certification or Documentary Evidence is
not successful, the Reporting SGFI must report the account as an
undocumented account.
e. Curing procedure (for a finding of indicia under Section 11.4.4.d.i)
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i. Notwithstanding a finding of indicia under Section 11.4.4.d.i above, a
Reporting SGFI is not required to treat an Account Holder as a
resident of a Foreign Jurisdiction if:
• The Account Holder information contains a current mailing or
residence address in the Foreign Jurisdiction, one or more
telephone numbers in the Foreign Jurisdiction (and no telephone
numbers in Singapore), or standing instructions (with respect to
Financial Accounts other than Depository Accounts) to transfer
funds to an account maintained in the Foreign Jurisdiction and
the Reporting SGFI obtains, or has previously reviewed and
maintains a record of:
a self-certification from the Account Holder of the
jurisdiction(s) of residence of such Account Holder that does
not include such Foreign Jurisdiction; and
Documentary Evidence, as elaborated in Section 11.8.3
below, establishing the Account Holder’s residence for tax
purposes other than such Foreign Jurisdiction.
The Account Holder information contains a currently effective
power of attorney or signatory authority granted to a person with
an address in a Foreign Jurisdiction, the Reporting SGFI obtains,
or has previously reviewed and maintains a record of:
a self-certification from the Account Holder of the jurisdiction(s)
of residence of such Account Holder that does not include
such Foreign Jurisdiction; or
Documentary Evidence, as elaborated in Section 11.8.3 below,
establishing the Account Holder’s residence for tax purposes
other than such Foreign Jurisdiction.
f. The self-certification that is part of the curing procedure does not need to
contain an express confirmation that an Account Holder is not resident in
a given Foreign Jurisdiction provided the Account Holder confirms that it
contains all its jurisdictions of residence (i.e., the information with respect
to the Account Holder’s jurisdiction(s) of residence is correct and
complete). Documentary Evidence is sufficient to establish that an
Account Holder is not resident in the relevant Foreign Jurisdiction if the
Documentary Evidence:
i. confirms that the Account Holder is resident in a jurisdiction other
than the relevant Foreign Jurisdiction;
ii. contains a current residence address outside the relevant Foreign
Jurisdiction; or
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iii. is issued by an authorised government body of a jurisdiction other
than the relevant Foreign Jurisdiction.
g. Additional procedures applicable to Lower Value Accounts
i. The review of Preexisting Individual Accounts that are Lower Value
Accounts for identifying Reportable Accounts must be completed by
31 December 2018.
ii. If there is a change in circumstances with respect to a Lower Value
Account that results in one or more indicia described in Section
11.4.4.d.i above being associated with the account, then the
Reporting SGFI must treat the Account Holder as a resident for tax
purposes of each Foreign Jurisdiction for which an indicium is
identified, unless it elects to apply the curing procedure described in
Section 11.4.4.e above and one of the exceptions described in that
section applies with respect to that account.
iii. Any Preexisting Individual Account that has been identified as a
Reportable Account pursuant to the due diligence procedures
described in Section 11.4.4 above shall be treated as a Reportable
Account in all subsequent years, unless the Account Holder ceases
to be a Reportable Person.
11.4.5 High Value Accounts
a. High Value Accounts refer to Preexisting Individual Accounts with an
aggregate balance or value that exceeds US$1,000,000 as of 31
December 2016 or 31 December of any subsequent year.
b. A Reporting SGFI must apply the enhanced review due diligence
procedures set out in this Section 11.4.5 to identify Reportable Accounts
in respect of High Value Accounts.
c. Electronic record search
i. With respect to High Value Accounts, the Reporting SGFI must review
electronically searchable data maintained by the Reporting SGFI for
any of the indicia described in Section 11.4.4.d.i above.
d. Paper record search
i. If the Reporting SGFI’s electronically searchable databases include
fields for, and capture all of the information described in
subparagraph ii below, then no further paper record search is
required. If the electronic databases do not capture all of the
information, then with respect to a High Value Account, the Reporting
SGFI must also review the current customer master file and, to the
extent not contained in the current customer master file, the following
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documents associated with the account and obtained by the
Reporting SGFI within the last five years for any of the indicia
described in Section 11.4.4.d.i above:
• the most recent Documentary Evidence collected with respect to
the account;
• the most recent account opening contract or documentation;
• the most recent documentation obtained by the Reporting SGFI
pursuant to AML / KYC Procedures or for other regulatory
purposes;
• any power of attorney or signature authority forms currently in
effect; and
• any standing instructions (other than with respect to a Depository
Account) to transfer funds currently in effect.
ii. A Reporting SGFI is not required to perform the paper record search
described in Section 11.4.5.d.i above if the Reporting SGFI’s
electronically searchable information includes the following:
• the Account Holder’s residence status;
• the Account Holder’s residence address and mailing address
currently on file with the Reporting SGFI;
• the Account Holder’s telephone number(s) currently on file, if any,
with the Reporting SGFI;
• in the case of Financial Accounts other than Depository Accounts,
whether there are any standing instructions to transfer funds in
the account to another account (including an account at another
branch of the Reporting SGFI or another FI);
• whether there is a current “in-care-of” address or “hold mail”
instruction for the Account Holder; and
• whether there is any power of attorney or signatory authority for
the account.
e. Relationship Manager Inquiry for actual knowledge
i. In addition to the electronic and paper record searches described
above, the Reporting SGFI must treat as a Reportable Account any
High Value Account assigned to a Relationship Manager (including
any Financial Accounts aggregated with such High Value Account) if
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the Relationship Manager has actual knowledge that the Account
Holder is a Reportable Person.
ii. Relationship management must be more than ancillary or incidental to
the job function of a person for the person to be considered a
Relationship Manager. A person is not considered a Relationship
Manager unless that person is ultimately charged with managing the
Account Holder’s affairs at the Reporting SGFI.
iii. The Relationship Manager also has an important role in identifying any
change in circumstances in relation to a High Value Account. A
Reporting SGFI must ensure that it has procedures in place to capture
changes that are made known to the Relationship Manager in respect
of the Account Holder’s Reportable status.
iv. An employee of the Reporting SGFI is only a Relationship Manager
for purposes of Section 11.4.5.e with respect to an account that has
an aggregate balance or value of more than US$1,000,000, taking into
account the account aggregation and currency translation rules set
forth in paragraph C of Section VII of the CRS. Thus, in determining
whether an employee of the Reporting SGI is a Relationship Manager,
i.e. the employee must satisfy the definition of Relationship Manager
(as explained in subparagraph ii. above), and the aggregate balance
or value of the Account Holder’s accounts must exceed US$1,000,000.
f. Effect of finding indicia
i. If none of the indicia listed in Section 11.4.4.d.i above are discovered
in the enhanced review of High Value Accounts and the account is not
identified as held by a person that is resident for tax purposes in a
Foreign Jurisdiction by the Relationship Manager, then no further
action is required until there is a change in circumstances that results
in one or more indicia being associated with the account.
ii. If any of the indicia listed in subparagraph (i)(a) to (i)(e) of Section
11.4.4.d.above are discovered in the enhanced review of High Value
Accounts described above, or if there is a subsequent change in
circumstances that results in one or more indicia being associated
with the account, then the Reporting SGFI must treat the Account
Holder as a resident for tax purposes of each Foreign Jurisdiction for
which an indicium is identified, unless it elects to apply the curing
procedure described in Section 11.4.4.e. above and one of the
exceptions described in that section applies with respect to that
account.
iii. If a “hold mail” or “in-care-of” address is discovered in the enhanced
review of High Value Accounts, and no other address and none of the
other indicia listed in subparagraph (i)(a) to (i)(e) in Section
11.4.4.d.above (except for the last indicia in subparagraph (i)(f) in
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Section 11.4.4.d above) are identified for the Account Holder, the
Reporting SGFI must obtain from such Account Holder a self-
certification or Documentary Evidence to establish the residence(s)
for tax purposes of the Account Holder. If the Reporting SGFI cannot
obtain such self-certification or Documentary Evidence, it must report
the account as an undocumented account.
g. Additional procedures applicable to High Value Accounts
i. If a Preexisting Individual Account is a High Value Account as of 31
December 2016, the Reporting SGFI must complete the enhanced
review procedures (which includes the electronic record search, paper
record search and Relationship Manager Inquiry) described above
with respect to such account by 31 December 2017.
ii. If a Preexisting Individual Account is not a High Value Account as of
31 December 2016, but becomes a High Value Account of the last
day of a subsequent calendar year, the Reporting SGFI must
complete the enhanced review procedures described above within the
calendar year following the year in which the account becomes a High
Value Account.
iii. If based on the review such account is identified as a Reportable
Account, the Reporting SGFI must report the required information
about such account with respect to the year in which it is identified as
a Reportable Account and subsequent years on annual basis, unless
the Account Holder ceases to be a Reportable Person.
iv. Once a Reporting SGFI applies the enhanced review procedures
described in this Section to a High Value Account, the Reporting SGFI
is not required to re-apply such procedures, other than the
Relationship Manager Inquiry described in Section 11.4.5.e above to
the same High Value Account in any subsequent year unless the
account is undocumented where the Reporting SGFI should re-apply
them annually until such account ceases to be undocumented.
h. Change in circumstances
i. If there is a change in circumstances with respect to a High Value
Account that results in one or more indicia listed in Section 11.4.4.d.i
above being associated with the account, then the Reporting SGFI
must treat the account as a Reportable Account with respect to each
Reportable Jurisdiction for which an indicium is identified, unless it
elects to apply the curing procedure described in Section 11.4.4.e
above and one of the exceptions described in that section applies with
respect to that account.
ii. A Reporting SGFI must implement procedures to ensure that a
Relationship Manager identifies any change in circumstances of an
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account. For example, if a Relationship Manager is notified that the
Account Holder has a new mailing address in a Foreign Jurisdiction,
the Reporting SGFI is required to treat the new address as a change
in circumstances and, if it elects to apply the curing procedure
described in Section 11.4.4.e above, the Reporting SGFI is required
to obtain the appropriate documentation from the Account Holder.
iii. A change in circumstances includes any change that results in the
addition of information relevant to a person’s status or otherwise
conflicts with such person’s status. In addition, a change in
circumstances include any change to, or addition of, information to the
Account Holder’s account and includes any addition, substitution, or
other change of an Account Holder, as well as any change to, or
addition of, information to any accounts associated with such account
(applying the account aggregation rules set forth in paragraph C of
Section VII of the CRS) if such change or addition of information
affects the status of the account holder.
11.5 New Individual Accounts
11.5.1 The following rules and procedures apply for purposes of identifying
Reportable Accounts among Financial Accounts held by individuals, which
are opened on or after 1 January 2017 (“New Individual Accounts”) and that
are not treated as Preexisting Accounts (Refer to Section 11.1.7.b above).
11.5.2 With respect to New Individual Accounts, the Reporting SGFI must, before
or as soon as is practicable after opening a new account, obtain a valid self-
certification that allows the Reporting SGFI to determine the Account
Holder’s residence(s) for tax purposes and confirm the reasonableness of
such self-certification based on the information obtained by the Reporting
SGFI in connection with the opening of the account, including any
documentation collected pursuant to AML / KYC Procedures.
11.5.3 A self-certification may be provided in any manner or in any form, provided
that it contains all the required information (see the following paragraph) and
the self-certification is signed or positively affirmed by the Account Holder or
a person with authority to sign for the Account Holder. The approach taken
by Reporting SGFI in obtaining the self-certification is expected to be in a
manner consistent with the procedures followed by the Reporting SGFI for
the opening of the account.
11.5.4 A “valid self-certification” is one that is signed or otherwise positively affirmed
by the Account Holder or a person with authority to sign for the account
holder. It states the date when the self-certification is signed or otherwise
positively affirmed; and it contains the following particulars of the individual
Account Holder:
• Name
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• Residential address
• Date of birth
• All the individual’s residences for tax purposes
• The Individual’s taxpayer identification number (TIN) with respect to each
of the residences for tax purposes
11.5.5 If the Reporting SGFI is unable to obtain a valid self-certification, the
Reporting SGFI cannot open the account. In cases where due to the
specificities of a transaction, it is not possible to obtain a valid self-
certification on ‘day one’ of the account opening process, the Reporting SGFI
can have more time (being not more than 90 days after the date of opening
of the account) to obtain the valid self-certification. Examples of such
situations that fall within the scope of Regulation 14(7) and (9) of the CRS
Regulations, include:
where an insurance contract has been assigned from one person to
another;
where an investor acquires shares in an investment trust on the
secondary market
11.5.6 Under Regulation 14(8) of the CRS Regulations, a Reporting SGFI’s failure
to obtain a valid self-certification in a timely manner is an offence under
Section 105M(1) of the Income Tax Act.
11.5.7 Once the Reporting SGFI has obtained a valid self-certification, it must
confirm the reasonableness of the self-certification, based on the information
obtained in connection with the opening of the account, including any
documentation obtained pursuant to AML / KYC procedures. A Reporting
SGFI is considered to have confirmed the reasonableness of a self-
certification if, in the course of account opening procedures and upon review
of the information obtained in connection with the opening of the account
(including any documentation collected pursuant to AML / KYC Procedures),
it does not know or have reason to know that the self-certification is incorrect
or unreliable.
11.5.8 If the self-certification fails the reasonableness test, the Reporting SGFI is
expected to either obtain (i) a new and valid self-certification or (ii) a
reasonable explanation and documentation, as appropriate, supporting the
reasonableness of the self-certification within the next 90 days. If the
Reporting SGFI is unable to obtain a new and valid self-certification or a
reasonable explanation and documentation from the Account Holder during
the 90-day period, the Reporting SGFI is not required to close the account,
but must treat the Account Holder as resident of the jurisdiction in which the
Account Holder claimed to be resident in the original self-certification and
any other jurisdiction(s) in which the Reporting SGFI has indications that the
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Account Holder is resident in. In addition, the Reporting SGFI is expected to
continue to use reasonable efforts to obtain a valid self-certification form the
Account Holder. Such efforts must be made at least once a year until (i) a
new and valid self-certification or (ii) a reasonable explanation and
documentation is obtained.
11.5.9 If the self-certification establishes that the Account Holder is resident for tax
purposes in a Reportable Jurisdiction, the Reporting SGFI must treat the
account as a Reportable Account.
11.5.10 A self-certification remains valid until there is a change in
circumstances that causes the Reporting SGFI to know, or have reason to
know, that the original self-certification is incorrect or unreliable. The
Reporting SGFI cannot rely on the original self-certification and must obtain
either a valid self-certification that establishes the Account Holder’s
residence(s) for tax purposes, or a reasonable explanation and
documentation (as appropriate) supporting the validity of the original self-
certification (and retain a copy or a notation of such explanation and
documentation). In addition, a Reporting SGFI is expected to notify any
person providing a self-certification of the person’s obligation to notify the
Reporting SGFI of a change in circumstances.
11.5.11 If the Reporting SGFI cannot obtain confirmation of the validity of the
original self-certification or a valid self-certification after 90 calendar days
from the date that the self-certification becomes invalid due to the change in
circumstances, the Reporting SGFI must treat the Account Holder as
resident of the jurisdiction in which the Account Holder claimed to be resident
in the original self-certification and the jurisdiction in which the Account
Holder may be resident as a result of the change in circumstances.
11.5.12 Standards of knowledge applicable to self-certifications and
Documentary Evidence
a. A Reporting SGFI has reason to know that a self-certification provided is
unreliable or incorrect if:
i. the self-certification is incomplete with respect to any item on the self-
certification that is relevant to the claims made by the person;
ii. the self-certification contains any information that is inconsistent with
the person’s claim; or
iii. the Reporting SGFI has other account information that is inconsistent
with the person’s claim.
b. Under the circumstances set out in subparagraph a. above, a Reporting
SGFI cannot rely on the original self-certification and must obtain either a
new and valid self-certification that establishes the residence(s) for tax
purposes of the Account Holder, or a reasonable explanation and
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documentation (as appropriate) that explain the discrepancy identified by
the Reporting SGFI.
c. A Reporting SGFI does not know or have reason to know that a self-
certification or Documentary Evidence is unreliable or incorrect solely
because of a change of address in the same jurisdiction as that of the
previous address. In addition, a Reporting SGFIFI does not know or have
reason to know that a self-certification or Documentary Evidence is
unreliable or incorrect solely because it discovers any of the indicia listed
in subparagraph (c) to (e) in Section 11.4.4.d.i and such indicia conflicts
with the self-certification or Documentary Evidence.
11.6 Preexisting Entity Accounts
11.6.1 The following rules and procedures apply for purposes of identifying
Reportable Accounts among Preexisting Accounts held by Entities
(“Preexisting Entity Accounts”).
11.6.2 Under Paragraph A of Section V of the CRS, a Preexisting Entity Account
with an aggregate account balance or value that does not exceed
US$250,000 as of 31 December 2016, is not required to be reviewed,
identified, or reported as a Reportable Account until the aggregate account
balance or value exceeds US$250,000 as of the last day of any subsequent
calendar year. (unless a Reporting SGFI elects otherwise, either with respect
to all Preexisting Entity Accounts or, separately, with respect to any clearly
identified group of such accounts)
11.6.3 A Preexisting Entity Account that has an aggregate account balance or value
that exceeds US$250,000 as of 31 December 2016, and a Preexisting Entity
Account that does not exceed US$250,000 as of 31 December 2016 but the
account balance or value of which exceeds US$250,000 as of the last day of
2017 or any subsequent calendar year, must be reviewed in accordance with
the procedures set forth in Section 11.6.4 below.
11.6.4 Review procedures for identifying Preexisting Entity Accounts with respect
to which reporting may be required.
a. For Preexisting Entity Accounts described in Section 11.6.3, the
Reporting SGFI must apply the review procedures described in this
Section 11.6.4 to determine whether the account is held by one or more
Entities that are Reportable Persons, and whether the account is held by
one or more Entities that are Passive NFEs with one or more Controlling
Persons who are Reportable Persons.
b. Determining the tax residence(s) of the Entity Account Holder:
i. A Reporting SGFI must review information maintained for regulatory
or customer relationship purposes (including information collected
pursuant to AML / KYC Procedures) to determine whether the
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information indicates that the Account Holder’s residence for tax
purposes. For this purpose, information indicating the Account
Holder’s tax residence includes place of incorporation or organisation,
or an address in a Foreign Jurisdiction.
ii. If the information indicates that the Account Holder is a Reportable
Person, the Reporting SGFI must treat the account as a Reportable
Account unless it obtains a self-certification from the Account Holder,
or reasonably determines based on information in its possession
(information previously recorded in the files of the Reporting SGFI) or
that is publicly available, that the Account Holder is not a Reportable
Person (Refer to Section 11.2.2 for the categories of persons that are
not Reportable Persons)
iii. “Publicly available” information” will include the following:
• information published by an authorised government body of a
jurisdiction;
• information in a publicly accessible register maintained or
authorised by an authorised government body of a jurisdiction;
• information disclosed on an established securities market; and
• any publicly accessible classification with respect to the Account
Holder that was determined based on a standardised industry
coding system and that was assigned e.g. by a trade organization
ora chamber of commerce, consistent with normal business
practices.
iv. In determining whether a Preexisting Entity Account is held by one or
more Entities that are Reportable Persons, the Reporting SGFI may
follow the guidance in subparagraphs (i) and (ii) in the order most
appropriate under the circumstances. Consequently, a Reporting
SGFI may first determine under subparagraph (ii) whether the
Preexisting Entity Account is held by an Entity that is not a Reportable
Person (e.g. a governmental entity), and thus, the account is not a
Reportable Account
c. Determining the tax residence(s) of the Controlling Person(s) of a Passive
NFE:
i. With respect to an Account Holder of a Preexisting Entity Account
(including an Entity that is a Reportable Person), the Reporting SGFI
must identify whether the Account Holder is a Passive NFE with one
or more Controlling Persons and determine the tax residence(s) of
such Controlling Persons. If any of the Controlling Persons of a
Passive NFE is a Reportable Person, then the account is treated as a
Reportable Account.
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ii. In making these determinations the Reporting SGFI must follow the
guidance below in the order most appropriate under the
circumstances:
For purposes of determining whether the Account Holder is a
Passive NFE, the Reporting SGFI must obtain a self-certification
from the Account Holder to establish its status, unless it has
information in its possession or that is publicly available, based on
which it can reasonably determine that the Account Holder is an
Active NFE or an FI other than a managed (Type B) Investment
Entity that is not a Participating Jurisdiction FI.
For purposes of determining the Controlling Persons of an Account
Holder, a Reporting SGFI may rely on information collected and
maintained pursuant to AML / KYC Procedures.
For purposes of determining the residence of a Controlling Person
of a Passive NFE, a Reporting SGFI may rely on:
Information collected and maintained pursuant to AML / KYC
Procedures in the case of a Preexisting Entity Account held
by one or more Passive NFEs with an aggregate account
balance or value that does not exceed US$1,000,000; or
A self-certification from the Account Holder or such Controlling
Person(s) in the case of a Preexisting Entity Account held by
one or more Passive NFEs with an account balance or value
that exceeds US$1,000,000. If a self-certification is required
to be collected and is not obtained with respect to a Controlling
Person of a Passive NFE, the Reporting SGFI must rely on
the indicia described in Section 11.4.4.d.i that it has in its
records for such Controlling Person to establish the
residence(s) of the Controlling Person. If the Reporting FI has
none of such indicia in its records, then no further action would
be required until there is a change in circumstances that
results in one or more indicia with respect to the Controlling
Person being associated with the account.
d. For the avoidance of doubt, a Reporting SGFI that cannot determine the
status of the Entity Account Holder as an Active NFE or an FI (other than
a managed (Type B) Investment Entity that is not a Participating
Jurisdiction FI) must presume it is a Passive NFE.
11.6.5 Timing of review and additional procedures applicable to Preexisting Entity
Accounts
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a. Review of Preexisting Entity Accounts with an aggregate account balance
or value that exceeds US$250,000 as of 31 December 2016 must be
completed by 31 December 2018.
b. Review of Preexisting Entity Accounts with an aggregate account balance
or value that does not exceed US$250,000 as of 31 December 2016, but
exceeds US$250,000 as of 31 December of 2017 or any subsequent year,
must be completed within the calendar year following the year in which
the aggregate account balance or value exceeds US$250,000.
c. If there is a change in circumstances with respect to a Preexisting Entity
Account that causes the Reporting SGFI to know, or have reason to know,
that the self-certification or other documentation associated with an
account is incorrect or unreliable, the Reporting SGFI must re-determine
the status of the account in accordance with the procedures set forth in
Section 11.6.4. In such a case, a Reporting SGFI must apply the following
procedures by the later of the last of the calendar year or 90 calendar
days following the discovery of the change in circumstances:
i. With respect to the determination of the Account Holder’s residence(s)
for tax purposes: a Reporting SGFI must obtain either (i) a self-
certification, or (ii) a reasonable explanation and documentation (as
appropriate) supporting the reasonableness of the original self-
certification or documentation (and retain a copy or a notation of such
explanation and documentation). If the Reporting SGFI fails to either
obtain a self-certification or confirm the reasonableness of the original
self-certification or documentation, it must treat the Account Holder as
a tax resident with respect to the jurisdiction(s) that are indicated on the
original self-certification and in which the Account Holder may be tax
resident as a result of the change in circumstances.
ii. With respect to the determination whether the Account Holder is a FI,
Active NFE or Passive NFE: a Reporting SGFI must obtain additional
documentation or a self-certification (as appropriate) to establish the
status of the Account Holder as an Active NFE or FI. If the Reporting
Financial Institution fails to do so, it must treat the Account Holder as a
Passive NFE.
iii. With respect to the determination of the Controlling Person of a Passive
NFE’s residence(s) for tax purposes: a Reporting SGFI must obtain
either (i) a self-certification, or (ii) a reasonable explanation and
documentation (as appropriate) supporting the reasonableness of a
previously collected self-certification or documentation (and retain a
copy or a notation of such explanation and documentation). If the
Reporting SGFI fails to either obtain a self-certification or confirm the
reasonableness of the previously collected self-certification or
documentation, it must rely on the indicia described in Section 11.4.4.d.i
it has in its records for such Controlling Person to determine the
residence(s) of the Controlling Person.
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11.7 New Entity Accounts
11.7.1 The rules and procedures set out under this Section 11.7 apply for purposes
of identifying Reportable Accounts among Financial Accounts held by
Entities and opened on or after 1 January 2017 (“New Entity Accounts”).
11.7.2 A Reporting SGFI must, before or as soon as is practicable after opening for
a New Account, take all reasonable efforts to determine whether (i) the Entity
Account Holder is a Reportable Person; and (ii) the Controlling Person of an
Account Holder that is a Passive NFE, is a Reportable Person.
11.7.3 Review procedures for New Entity Accounts
a. Determine the tax residence of the Entity:
i. A Reporting SGFI must, before or as soon as practicable after opening
an account, obtain a valid self‑certification, which may be part of the
account opening documentation, that allows the Reporting SGFI to
determine the Account Holder’s residence(s) for tax purposes and
confirm the reasonableness of such self‑certification based on the
information obtained by the Reporting SGFI in connection with the
opening of the account, including any documentation collected pursuant
to AML / KYC Procedures. An Entity that has no residence for tax
purposes shall be treated as resident in the jurisdiction in which its place
of effective management is situated. When that is the case and such an
Entity certifies that it has no residence for tax purposes, the Reporting
SGFI may rely on the address of the principal office of the Entity as a
proxy for determining the tax residence of the Account Holder.
ii. If the self-certification indicates that the Account Holder is tax resident
in a Reportable Jurisdiction, the Reporting SGFI must treat the account
as a Reportable Account unless it reasonably determines based on
information in its possession or that is publicly available, that the
Account Holder is not a Reportable Person with respect to such
Reportable Jurisdiction, for example, a corporation that is publicly
traded.
iii. In determining whether a New Entity Account is held by one or more
Entities that are Reportable Persons, the Reporting SGFI may follow
the guidance on (i) and (ii) in the order most appropriate under the
circumstances. That would allow a Reporting SGFI, for example, to
determine under (ii) that a New Entity Account is held by an Entity that
is not a Reportable Person (e.g. a corporation that is publicly traded)
and, thus, the account is not a Reportable Account.
b. Determine the tax residence of the Controlling Persons of a Passive NFE:
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i. With respect to an Account Holder of a New Entity Account (including
an Entity that is a Reportable Person), the Reporting SGFI must identify
whether the Account Holder is a Passive NFE with one or more
Controlling Persons and determine the tax residence of such
Controlling Persons. If any of the Controlling Persons of a Passive NFE
is a Reportable Person, then the account must be treated as a
Reportable Account.
ii. In making these determinations the Reporting SGFI must follow the
guidance in the order most appropriate under the circumstances below:
For purposes of determining whether the Account Holder is a
Passive NFE, the Reporting SGFI must obtain a valid self-
certification from the Account Holder to establish its status, unless it
has information in its possession or that is publicly available, based
on which it can reasonably determine that the Account Holder is an
Active NFE or an FI other than a managed (Type B) Investment
Entity that is not a Participating Jurisdiction FI
For purposes of determining the Controlling Persons of an Account
Holder that is a Passive NFE, a Reporting SGFI may rely on
information collected and maintained pursuant to AML / KYC
Procedures that must be consistent with Recommendations 10 and
25 of the FATF Recommendations (as adopted in February 2012),
including always treating the settlor(s) of a trust as a Controlling
Person of the trust.
For purposes of determining the tax residence of a Controlling
Person of a Passive NFE, a Reporting SGFI may only rely on a valid
self‑certification from either the Account Holder or such Controlling
Person.
c. A “valid self-certification” is one that is signed or otherwise positively
affirmed by the person making the self-certification or a person with
authority to sign for that first-mentioned person. The self-certification
contains the date when the self-certification is signed or otherwise
positively affirmed; and also has the following particulars:
i. If the Account Holder is an Entity that is a Passive NFE:
The NFE’s name;
The NFE’s registered or business address
All of the NFE’s residences for tax purposes
The NFE’s taxpayer identification number (TIN) with respect to
each of the residences for tax purposes
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The name, Date of birth and residential address of each
Controlling Person
The residences for a tax purpose and the corresponding TIN with
respect to each of the residences for tax purposes of each
Controlling Person
ii. If the Account Holder is an Entity that is not a Passive NFE:
The Entity’s name;
The Entity’s registered or business address
All of the Entity’s residences for tax purposes
The Entity’s taxpayer identification number (TIN) with respect to
each of the residences for tax purposes
Whether the Entity is FI or an NFE, and a description of the type
of FI or NFE.
iii. If the Controlling Person of a Passive NFE is making the self-
certification:
The Controlling Person’s name
The Controlling Person’s residential address
The Controlling Person’s Date of birth
All of the Controlling Person’s residences for tax purposes
The Controlling Person’s taxpayer identification number (TIN) with
respect to each of the residences for tax purposes
iv. In general, the person with authority to sign on behalf of an Entity will
include the following:
A director of a company;
A partner of a partnership;
A trustee of a trust;
For other types of Entity, any person holding an equivalent title to
any of the above; and
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Any other person with written authorization from the Entity to sign
documentation on behalf of the Entity.
d. Where there is a change in circumstances with respect to a New Entity
Account that causes the Reporting SGFI to know, or have reason to know,
that the self-certification or other documentation associated with an
account Is incorrect or unreliable, the Reporting SGFI must re-determine
the status of the account in accordance with the procedures as set out in
Section 11.6.5.c above.
11.8 Special rules and definitions
11.8.1 Reliance on self-certifications and Documentary Evidence
a. A Reporting SGFI may not rely on a self-certification or Documentary
Evidence if the Reporting SGFI knows or has reason to know that the
self-certification or Documentary Evidence is incorrect or unreliable.
b. A Reporting SGFI has reason to know that a self-certification or
Documentary Evidence is unreliable or incorrect if its knowledge of
relevant facts or statements contained in the self-certification or other
documentation, including the knowledge of the relevant relationship
managers, if any, is such that a reasonably prudent person in the position
of the Reporting SGFI would question the claim being made. A Reporting
SGFI also has reason to know that a self-certification or Documentary
Evidence is unreliable or incorrect if there is information in the
documentation or in the Reporting SGFI’s account files that conflicts with
the person’s claim regarding its status.
11.8.2 Account Aggregation and Currency Translation Rules
a. Aggregation of Individual Accounts
i. For purposes of determining the aggregate balance or value of
Financial Accounts held by an individual, a Reporting SGFI is required
to aggregate all Financial Accounts maintained by the Reporting SGFI,
or by a Related Entity, but only to the extent that the Reporting SGFI’s
computerised systems link the Financial Accounts by reference to a
data element such as client number or taxpayer identification number,
and allow account balances or values to be aggregated. Each holder
of a jointly held Financial Account shall be attributed the entire balance
or value of the jointly held Financial Account for purposes of applying
the aggregation requirements described in this Section 11.8.2.
b. Aggregation of Entity Accounts
i. For purposes of determining the aggregate balance or value of
Financial Accounts held by an Entity, a Reporting SGFI is required to
take into account all Financial Accounts that are maintained by the
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Reporting SGFI, or by a Related Entity, but only to the extent that the
Reporting SGFI’s computerised systems link the Financial Accounts
by reference to a data element such as client number or Taxpayer
Identification Number, and allow account balances or values to be
aggregated. Each holder of a jointly held Financial Account shall be
attributed the entire balance or value of the jointly held Financial
Account for purposes of applying the aggregation requirements
described in this Section 11.8.2.
c. Special aggregation rule applicable to Relationship Managers
i. For purposes of determining the aggregate balance or value of
Financial Accounts held by a person to determine whether a Financial
Account is a High Value Account, a Reporting SGFI is also required,
in the case of any Financial Accounts that a Relationship Manager
knows, or has reason to know, are directly or indirectly owned,
controlled, or established (other than in a fiduciary capacity) by the
same person, to aggregate all such accounts.
d. Currency Translation Rule (Amounts read to include equivalent in other
currencies)
i. Where accounts are denominated in a currency other than the US
dollar, the US dollar threshold amounts described in the CRS must be
converted to the currency that the accounts are denominated in, using
a published spot rate determined as of the last day of the calendar
year preceding the year in which the determination is done. The
method of conversion must be applied consistently.
ii. Example: A Reporting SGFI maintains a Preexisting Individual
Account that has an account balance of SGD1,200,000 as of 31
December 2016. The Reporting SGFI wants to determine if the
account is a Preexisting High Value Account and convert the US dollar
threshold amount of $1,000,000 to Singapore Dollar (“SGD”) using the
published spot rate determined as of the last day of the calendar year
(i.e. 31 December 2015) preceding the year in which the threshold is
being applied (i.e. 2016 in this example).
11.8.3 Documentary Evidence
a. For the purpose of the due diligence procedures described in Section 11,
acceptable Documentary Evidence includes any of the following:
i. A certificate of residence issued by an authorised government body
(for example, a government or agency thereof, or a municipality) of
the jurisdiction in which the payee claims to be a resident.
ii. With respect to an individual, any valid identification issued by an
authorised government body (for example, a government or agency
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thereof, or a municipality), that includes the individual’s name and is
typically used for identification purposes.
iii. With respect to an Entity, any documentation issued by a public
agency or authorised government body that includes the name of the
Entity, and either the address of its principal office in the jurisdiction in
which it claims to be resident in or the jurisdiction in which the Entity
was organised or created.
iv. Any audited financial statement, third-party credit report, bankruptcy
filing, or securities regulator’s report.
b. While a Reporting SGFI may rely on Documentary Evidence unless it
knows or has reason to know that it is incorrect or unreliable, it is expected
to give preference to a piece of Documentary Evidence that is more
recent, or more specific, than another piece of Documentary Evidence.
c. Documentary Evidence that contains an expiration date may be treated
as valid on the later of that expiration date, or the last day of the fifth
calendar year following the year in which the Documentary Evidence is
provided to the Reporting SGFI. However, the following Documentary
Evidence is considered to remain valid indefinitely:
i. Documentary Evidence that is not generally renewed or amended
(such as a certificate of incorporation); or
ii. Documentary Evidence provided by a Non-Reporting FI or a
Reportable Jurisdiction Person that is not a Reportable Person.
d. All other Documentary Evidence is valid until the last day of the fifth
calendar year following the year in which the Documentary Evidence is
provided to the Reporting SGFI.
11.8.4 Alternative procedures for Financial Accounts held by individual beneficiaries
of a Cash Value Insurance Contract or an Annuity Contract
a. A Reporting SGFI may presume that an individual beneficiary (other than
the owner) of a Cash Value Insurance Contract or an Annuity Contract
receiving a death benefit is not a Reportable Person and may treat such
Financial Account as other than a Reportable Account unless the
Reporting SGFI has actual knowledge, or reason to know, that the
beneficiary is a Reportable Person. A Reporting SGFI has reason to know
that a beneficiary of a Cash Value Insurance Contract or an Annuity
Contract is a Reportable Person if the information collected by the
Reporting SGFI and associated with the beneficiary contains indicia as
described in Section 11.4.4.d.i above. If a Reporting SGFI has actual
knowledge, or reason to know, that the beneficiary is a Reportable Person,
the Reporting SGFI must follow the procedures in Section 11.4 above.
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11.8.5 Reliance on third parties
a. A Reporting SGFI may appoint a third party service provider or agent to
carry out its CRS obligations. Under Regulation 17(2) of the CRS
Regulations, the agent so appointed must, upon the Reporting SGFI’s
request, provide the Reporting SGFI with all records, Documentary
Evidence and information that is in the agent’s possession or under the
agent’s control that the agent uses to carry out the Reporting SGFI’s CRS
obligations; and all records, documents and information that the agent
obtains in the course of carrying out the Reporting SGFI’s CRS
obligations.
b. When a Reporting SGFI relies on an agent to carry out its CRS obligations,
the agent must meet the due diligence requirements as set out in this
Section 11. These due diligence obligations remain the responsibility of
the Reporting SGFI and any due diligence failures will be the
responsibility of the Reporting SGFI.
12 Registration
12.1 Under Regulation 13(1) of the CRS Regulations, an Entity that becomes a
Reporting SGFI at any time during the calendar year must register with IRAS
by 31 March of the following year. An Entity that becomes a Reporting SGFI
between 1 January 2017 and 31 December 2017 must register with IRAS by
31 March 2018.
12.2 However, a Reporting SGI is not required to register with IRAS if:
12.2.1 It is an Investment Entity; and it only carries out one or both of the following
activities as an Investment Entity:
• rendering investment advice to a customer, and acting on behalf of that
customer for the purpose of investing, managing or administering
Financial Assets deposited in the name of that customer with another FI;
• managing portfolios for a customer, and acting on behalf of that customer
for the purpose of investing, managing or administering Financial Assets
deposited in the name of that customer with another FI.
12.2.2 It is an Entity, other than a trust, that is resident in Singapore and one or
more Participating Jurisdictions; and provided that the following conditions
are met:
• The Reporting SGFI does not maintain any Financial Accounts in
Singapore or it does not have a branch located in Singapore; and
• CRS reporting and due diligence are carried out in the other Participating
Jurisdiction(s) where the financial accounts are maintained or the branch
is located.
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12.2.3 In the case of a trust that is resident for CRS purposes in Singapore and one
or more Participating Jurisdictions and provided the following conditions are
met:
• All the information required to be reported in relation to Reportable
Accounts of the trust is reported in the other Participating Jurisdiction(s)
because the trust is treated as resident for tax purposes there; and
• Each trustee, including the Singapore resident trustee, must be able to
demonstrate that all necessary reporting in the other Participating
Jurisdiction by the trust is actually taking place.
12.3 A trust, which qualifies as a Non-Reporting FI because the trustee of the trust
is a Reporting SGFI and the trustee undertakes the CRS due diligence and
reporting obligations of the trust (i.e. a ‘trustee-documented trust’), will not
need to register with IRAS as a Reporting SGFI. However, in order for the
trustee to report on the trust’s behalf, the trustee will have to provide the
name and tax reference number (where available) of trust to IRAS after the
trustee has registered with IRAS as a Reporting SGFI.
12.4 As part of the registration application, a Reporting SGFI will need to provide
IRAS with particulars of an individual who is authorised to be the Reporting
SGFI’s point of contact (POC) on CRS matters.
12.5 A Reporting SGFI must notify IRAS as soon as practicable of any change in
the FI’s and its POC’s particulars after the submission of the FI’s application
for registration.
12.6 Under Regulation 13(6) of the CRS Regulations, a Reporting SGFI’s failure
to apply for CRS Registration by the 31 March of the calendar year following
the year in which it becomes a Reporting SGFI is an offence under Section
105M(1) of the Income Tax Act.
12.7 IRAS will develop an IT System for Reporting SGFIs to register with IRAS
and the registration module is expected to be rolled out before 30 September
2017. Please refer to the IRAS CRS webpage for more details on CRS
Registration.
13 Reporting
13.1 Reportable Accounts
13.1.1 An account is treated as a Reportable Account beginning as of the date it is
identified as such pursuant to the CRS due diligence procedures set out in
Section 11 of this e-Tax Guide that the Reporting SGFI is required to apply.
Generally, information must be reported annually to IRAS on that account in
the calendar year following the year to which the reportable information
relates.
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13.1.2 Once a Reporting SGFI has applied the CRS due diligence procedures in
respect of the financial accounts it holds and has identified the Reportable
Accounts, it must report certain information regarding those accounts to
IRAS in accordance with the timetable in Section 13.5 below.
13.1.3 Under the CRS Regulations, a Reportable Account will also include an
undocumented account which refers to a pre‑existing account where —
a. the Account Holder is an individual;
b. the Reporting SGFI that maintains the account does not have any indicia
other than a hold mail or in‑care‑of address (in subparagraph (i)(f) in
Section 11.4.4.d of this e-Tax Guide); and
c. the Reporting SGFI is unable to obtain any Documentary Evidence, or
valid self‑certification from the Account Holder to establish the Account
Holder’s residence for tax purposes.
13.1.4 Every Reporting SGFI, other than one that is listed in Section 12.2 of this e-
Tax Guide, that maintains Financial Accounts that are not Reportable
Accounts is required to file a nil return with IRAS for the relevant reporting
year.
13.2 Information to be reported with respect to each Reportable Account
13.2.1 The information to be reported with respect to each Reportable Account in
relation to (i) each Reportable Person that is the Account Holder; and (ii)
each Passive NFE that is the Account Holder and is identified as having one
or more Controlling Persons that is a Reportable Person is:
A. name;
B. address;
C. date of birth (for individuals);
D. jurisdiction(s) of residence;
E. the TIN associated with each jurisdiction(s) of residence that is provided
in D
F. the account number or the functional equivalent of an account number;
G. the name and identifying number (i.e. Singapore Tax Reference
Number) of the Reporting SGFI; and
H. the account balance or value (including, in the case of a Cash Value
Insurance Contract or Annuity Contract, the cash value or surrender
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value) as of the end of the calendar year or other appropriate reporting
period or if the account was closed during the year or period, the closure
of the account.
13.2.2 In addition to elements (A) to (H) above, the following payment information
(which may be reported in US dollars or the equivalent in other currencies)
in relation to the calendar year or other appropriate reporting period must
also be reported:
d. In the case of any Custodial Account:
i. the total gross amount of interest paid or credited to the account (or
with respect to the account);
ii. the total gross amount of dividends paid or credited to the account (or
with respect to the account);
iii. the total gross amount of other income generated with respect to the
assets held in the account paid or credited to the account (or with
respect to the account); and
iv. the total gross proceeds from the sale or redemption of Financial
Assets paid or credited to the account with respect to which the
Reporting SGFI acted as a custodian, broker, nominee, or otherwise
as an agent for the Account Holder (for Reporting Year 2018 onwards).
e. In the case of any Depository Account:
i. the total gross amount of interest paid or credited to the account.
f. In the case of any account other than a Custodial Account or a Depository
Account, the total gross amount paid or credited to the Account Holder
with respect to the account during the calendar year or other appropriate
reporting period, with respect to which the Reporting SGFI is the obligor
or debtor, including the aggregate amount of any redemption payments
made to the Account Holder.
13.3 Explanation of information required
13.3.1 Address
a. The address to be reported with respect to an account held by a
Reportable Person is the address recorded by the Reporting SGFI for the
Account Holder pursuant to the CRS due diligence procedures detailed
in Section 11 of this e-Tax Guide. In the case of an account held by an
individual that is a Reportable Person, the address to be reported is the
current residential address of the individual; or if no residential address is
associated with the Account Holder, the address for the account used for
mailing purpose by the Reporting SGFI.
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b. In the case of an account held by an Entity, that address to be reported
is the address of the Entity that is registered with any public agency
(“registered address”) or the one at which the Entity is carrying on its
business (“business address”).
c. In the case of an account held by a Passive NFE that is identified as
having one or more Controlling Persons who are Reportable Persons, the
address to be reported for the NFE is the registered or business address
of the Entity, and the address to be reported for each Controlling Person
of the Entity is the Controlling Person’s residential address.
13.3.2 Taxpayer Identification Numbers (TINs)
a. This refers to a unique identifier assigned to the Account Holder by a tax
administration in the Account Holder’s jurisdiction of tax residence.
b. The TIN is not required to be reported if (i) a TIN is not issued by the
relevant Reportable Jurisdiction or (ii) the domestic law of the Reportable
Jurisdiction does not require the collection of the TIN issued by such
jurisdiction.
c. Where a Reporting SGFI does not have the TIN or date of birth for a
Preexisting Account in its records, the Reporting SGFI is required to use
reasonable efforts to obtain the TIN and date of birth with respect to
Preexisting Accounts by the end of the second calendar year following
the year in which such accounts were identified as Reportable Accounts,
unless (i) one of the exceptions in subparagraph b above applies with
respect to the TIN and it is not required to be reported, or (ii) the Reporting
SGFI has obtained reasonable explanation and, where applicable,
documentation from the Account Holder or Controlling Person on why the
TIN is not available. “Reasonable efforts” means genuine attempts to
acquire the TIN and date of birth of the Account Holder of a Reportable
Account. Such efforts must be made, at least once a year, during the
period between the identification of the Preexisting Account as a
Reportable Account and the end of the second calendar year following
the year of that identification and should continue to be made after the
second calendar if the TIN and date of birth are not acquired by then.
Examples of reasonable efforts include contacting the Account Holder
(e.g. by mail, in-person or by phone), including a request made as part of
other documentation or electronically (e.g. by facsimile or by e-mail); and
reviewing electronically searchable information maintained by a Related
Entity of the Reporting SGFI, in accordance with the aggregation rules
set forth in Section 11.8.2 of this e-Tax Guide. Reasonable efforts do not
necessarily require closing, blocking, or transferring the account, nor
conditioning or otherwise limiting its use, but such measures could be
taken to urge Account Holders, especially those that did not respond the
Reporting SGFI’s initial request, to provide the TIN and date of birth
information to the Reporting SGFI.
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d. For New Accounts, a TIN is required to be reported unless (i) one of the
exceptions in subparagraph b. applies with respect to the TIN and it is not
required to be reported, or (ii) the Reporting SGFI has obtained
reasonable explanation and, where applicable, documentation from the
Account Holder or Controlling Person on why the TIN is not available.
e. For reporting to IRAS, where a Reporting SGFI is not able to provide the
TIN used by the residence jurisdiction, a reason (in the form of a reason
code) is to be provided in lieu of the TIN. Hence the TIN element cannot
be left blank. Please refer to the IRAS CRS Return XML Schema User
Guide that is published on the IRAS’ CRS webpage for more information.
13.3.3 Account Number
a. This is the unique identifying number or code that is sufficient for a
Reporting SGFI to identify the Reportable Account held by the named
Account Holder. A contract or policy number would generally be
considered functional equivalents of an account number.
13.3.4 Account Balance or Value
a. The Reporting SGFI must report the balance or value of the account as
of the end of the calendar year or other appropriate reporting period or, if
the account was closed during such year or period, the closure of the
account. In the case of an account that is a Cash Value Insurance
Contract or Annuity Contract, the Reporting SGFI must report the cash
value or surrender value of the account.
b. General
i. An account with a balance or value that is negative must be reported
as having an account balance or value equal to zero.
ii. The account balance or value of an account may be reported in US
dollars or in the currency in which the account is denominated.
c. Valuation
i. In arriving at the balance or value the Reporting SGFI will use the
valuation methods that it applies in the normal course of its business.
Any valuation method adopted must be consistent and verifiable.
ii. Where it is not possible to, or not usual to value an account at 31
December, a Reporting SGFI should use the normal valuation point
for the account that is nearest to 31 December.
iii. Where the 31 December falls on a weekend or non-working day, the
date to be used is the last working day before that 31 December.
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iv. The balance or value of the account is not to be reduced by any
liabilities or obligations incurred by an Account Holder with respect to
the account or any of the assets held in the account.
d. Joint Accounts
i. Where a Financial Account is jointly held, the balance or value to be
reported in respect of each joint Account Holder who is a Reportable
Person is the entire balance or value of the account.
e. Account closures
i. Where an account was closed during the year, the account balance
or value to be reported is zero and the Reporting SGFI must report
that the account was closed.
f. Dormant Accounts
i. An account can be indicated as Dormant if it meets all of the following
conditions:
the Account Holder has not initiated a transaction with regard to
the account or any other account held by the Account Holder with
the Reporting SGFI in the previous three years;
the Account Holder has not communicated with the Reporting
SGFI with regard to that account or any other account held by the
Account Holder in the previous six years; and
Where the account is a Cash Value Insurance Contract, the
Reporting SGFI that maintains the account has not, in the previous
six years, communicated with the Account Holder regarding the
account or any other account held by the Account Holder with the
FI.
13.3.5 Gross proceeds from sale or redemption of Financial Assets
a. In the case of a Custodial Account, information to be reported includes
the total gross proceeds from the sale or redemption of Financial Assets
paid or credited to the account during the calendar year or other
appropriate reporting period with respect to which the Reporting SGFI
acted as a custodian, broker, nominee, or otherwise as an agent for the
Account Holder. The term “sale or redemption” means any sale or
redemption of Financial Assets, determined without regard to whether the
owner of such Financial Assets is subject to tax with respect to such sale
or redemption.
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b. The total gross proceeds from a sale or redemption means the total
amount realised as a result of a sale or redemption of Financial Assets.
In the case of a sale effected by a broker, the total gross proceeds from
a sale or redemption means the total amount paid or credited to the
account of the person entitled to the payment increased by any amount
not so paid by reason of the repayment of margin loans; the broker may
(but is not required to) take commissions with respect to the sale into
account in determining the total gross proceeds. In the case of a sale of
an interest bearing debt obligation, gross proceeds include any interest
accrued between interest payment dates.
13.3.6 Gross amounts paid or credited
a. The information to be reported, in the case of any account other than a
Custodial Account or a Depository Account, includes the total gross
amount paid or credited to the Account Holder with respect to the account
during the calendar year or other appropriate reporting period with
respect to which the Reporting Financial Institution is a creditor or debtor.
Such “gross amount” includes, for example, the aggregate amount of:
i. any redemption payments made (in whole or part) to the Account
Holder during the calendar year or other appropriate reporting period;
and
ii. any payments made to the Account Holder under a Cash Value
Insurance Contract or an Annuity Contract during the calendar year or
other appropriate reporting period, even if such payments are not
considered Cash Value in accordance to Section 9.5.2 above.
13.4 Discretionary Trusts
13.4.1 A Reporting SGFI need not report any information about a beneficiary of a
discretionary trust that is a Controlling Person of the trust for that calendar
year if:
a. the trust is a Passive NFE; and
b. the institution knows that the beneficiary did not receive any distribution
from the trust in that calendar year.
13.5 Timelines for reporting to IRAS
13.5.1 Unless advised otherwise by IRAS, all information for the relevant reporting
year is to be submitted to IRAS by 31 May of the year following the end of
the calendar during which the Reportable Account was maintained. For
example, a Reporting SGFI will submit information in relation to a Reportable
Account for Reporting Year 2017 to IRAS by 31 May 2018.
13.6 Format for Reporting to IRAS
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13.6.1 The format in which reporting will be required is the prevailing CRS XML
Schema (“XML Schema”) as published on the IRAS CRS webpage. Returns
providing information on Reportable Accounts will have to be prepared in
accordance to the published XML Schema and the IRAS CRS Return XML
Schema User Guide. Reporting SGFIs are advised to seek the services of
an IT professional or vendor to assist them in capturing and preparing the
data in accordance to the XML Schema if they do not have the relevant
expertise to do so.
13.6.2 Reporting SGFIs with a small volume of Reportable Accounts (< 100
accounts) and that do not wish to acquire a reporting tool to generate the
CRS Return in XML format can submit their CRS Returns using fillable PDF
forms. This PDF form will be available for download from the IRAS webpage
when the first return filing commences in 2018.
13.7 Submission of Return
13.7.1 IRAS will develop an IT System for Reporting SGFIs to submit their CRS
Returns to IRAS. The return submission module is expected to be rolled out
by the end of first quarter of 2018. Please refer to the IRAS CRS webpage
for further details on return submission.
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Contact Information
For enquiries on this user guide, please contact:
International Tax Affairs and Relations Division
Inland Revenue Authority of Singapore
55 Newton Road
Singapore 307987
Fax: 6351 2959
Email: CRS@iras.gov.sg
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Annex A – Template for Submission of Comments
Date Submitted:
Name:
For non-individuals, please identify the company, institution or
association and provide the name of a contact person.
Contact Details:
E.g. DID, fax, email address
Summary of
feedback:
Details:
S/No.
Section/
Paragraph
Commentsa
Proposed change to draft e-
Tax Guide
a Illustrations and diagrams can be attached as Annexes.

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