A deal between Germany and Singapore will help Berlin track down potential tax evaders, using Singaporean banks to hide away assets. It was announced by Germany’s finance minister Wolgang Schäuble, who is visiting Singapore, and local authorities.
The deal follows another announcement in early October by the Monetary Authority of Singapore (MAS) which plans to heavily penalise banks that ‘facilitate tax evasion’ by dealing with tax crimes as money laundering ‘predicate offences’. The new laws will apply to both new and existing accounts.
The MAS said the new measures will “discourage the entry of tax evasion monies into our financial system and protect Singapore’s reputation as a trusted financial centre.” The measures have been expected for over a year.
The new measure require banks to carry out stringent due diligence on prospective and existing customers, and to monitor all transactions carefully. Any suspicious activity must be reported to the MAS at the risk of incurring fines of up to $1m.
The terms of the arrangement between Singapore and Germany will see the two countries sharing information to ensure domestic tax laws are being observed when moving money abroad, independent of where the taxpayer resides.
Singapore had in excess of $1tn of assets under management at the end of 2011, and is likely to report an increase this year.