Singapore a haven for German money?

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Swiss bank UBS has reportedly recommended its clients to seek shelter from the German revenue office in Singapore.

Singapore has made it in the news as a possible destination for wealthy German individuals’ funds that are currently kept in Switzerland for tax reasons.

Since a tax deal has been signed between Switzerland and Germany that includes a delinquent flat tax of 26.4 per cent on all allegedly untaxed funds kept at Swiss banks and is supposed to come into effect by January 1, 2013, some Swiss bankers have reportedly advised clients to transfer their money to Singapore or other tax havens in Southeast Asia before the new rule will be enforced.

It is estimated that German clients hold about 150 billion euros ($184.5 billion) in Swiss accounts.

German investigators who recently purchased data on Swiss bank clients from whistleblowers say they have retained evidence that shows how Swiss banks allegedly help clients transfer their assets to Southeast Asia to evade taxes, according to a report by Financial Times Deutschland. One of the banks reportedly involved is Switzerland’s leading financial institution UBS.

Singapore is well known in the international financial community as a secretive offshore finance hub, along with Hong Kong. There are no information exchange treaties for banks, and offshore accounts are not taxable. Furthermore, capital gains are not taxed. Individuals are only taxed on income earned directly in Singapore, and for the super wealthy, there are no inheritance taxes.

However, the Swiss finance minister and UBS have denied that money of German tax dodgers is being funnelled to Singapore “in a major way”. Swiss Finance Minister Eveline Widmer-Schlumpf told German magazine Der Spiegel  that there are “no indications of a mass-evasion of German funds” to the city state.

Until 2009, Singapore was on the OECD “gray list” of countries that had not implemented international tax standards. In recent years, however, Singapore has signed taxation treaties with many countries. But in 2011, the OECD criticised Singapore for having implemented fewer than half of the double taxation treaties it had signed. Germany and Singapore are still discussing the implementation of their bilateral agreement, which came into effect in 2006.

“The Singapore government is proposing changes to its tax laws to meet demands from the US and Europe to clamp down on bank secrecy,” Singapore’s Finance Ministry said in a statement last week when the discussion about German tax evaders was erupting.

“Singapore will seek to amend its domestic laws to allow it to extend further cooperation on information exchange via double-taxation agreements with other countries,” the statement said.

 

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Reading Time: 2 minutes

Swiss bank UBS has reportedly recommended its clients to seek shelter from the German revenue office in Singapore.

Singapore has made it in the news as a possible destination for wealthy German individuals’ funds that are currently kept in Switzerland for tax reasons.

Reading Time: 2 minutes

Swiss bank UBS has reportedly recommended its clients to seek shelter from the German revenue office in Singapore.

Singapore has made it in the news as a possible destination for wealthy German individuals’ funds that are currently kept in Switzerland for tax reasons.

Since a tax deal has been signed between Switzerland and Germany that includes a delinquent flat tax of 26.4 per cent on all allegedly untaxed funds kept at Swiss banks and is supposed to come into effect by January 1, 2013, some Swiss bankers have reportedly advised clients to transfer their money to Singapore or other tax havens in Southeast Asia before the new rule will be enforced.

It is estimated that German clients hold about 150 billion euros ($184.5 billion) in Swiss accounts.

German investigators who recently purchased data on Swiss bank clients from whistleblowers say they have retained evidence that shows how Swiss banks allegedly help clients transfer their assets to Southeast Asia to evade taxes, according to a report by Financial Times Deutschland. One of the banks reportedly involved is Switzerland’s leading financial institution UBS.

Singapore is well known in the international financial community as a secretive offshore finance hub, along with Hong Kong. There are no information exchange treaties for banks, and offshore accounts are not taxable. Furthermore, capital gains are not taxed. Individuals are only taxed on income earned directly in Singapore, and for the super wealthy, there are no inheritance taxes.

However, the Swiss finance minister and UBS have denied that money of German tax dodgers is being funnelled to Singapore “in a major way”. Swiss Finance Minister Eveline Widmer-Schlumpf told German magazine Der Spiegel  that there are “no indications of a mass-evasion of German funds” to the city state.

Until 2009, Singapore was on the OECD “gray list” of countries that had not implemented international tax standards. In recent years, however, Singapore has signed taxation treaties with many countries. But in 2011, the OECD criticised Singapore for having implemented fewer than half of the double taxation treaties it had signed. Germany and Singapore are still discussing the implementation of their bilateral agreement, which came into effect in 2006.

“The Singapore government is proposing changes to its tax laws to meet demands from the US and Europe to clamp down on bank secrecy,” Singapore’s Finance Ministry said in a statement last week when the discussion about German tax evaders was erupting.

“Singapore will seek to amend its domestic laws to allow it to extend further cooperation on information exchange via double-taxation agreements with other countries,” the statement said.

 

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