- Elizabeth A. McMorrow
Singapore Increased FATCA/CRS Penalties
Singapore recently increased the penalties for both FATCA and Common Reporting Standard (CRS) non-registration and non-filing offenses. As of November 16, 2021, the penalties are SGD$5000 (approximately US$3647) upon conviction, and a further fine of SGD$100 (approximately US$73) per day for a continuing offense.
Singapore Financial Institutions (FIs) have the following obligations under FATCA and CRS:
Register for FATCA and CRS with IRAS.
Perform FATCA and CRS due diligence on all Financial Accounts the FI maintains (e.g. Preexisting Accounts for individuals and entities, New Accounts for individuals and entities).
Perform FATCA due diligence on all payments to Non-participating Financial Institutions (NPFIs).
Report all FATCA and CRS Reportable Accounts the FI maintains or file a Nil Return (if the FI does not maintain any Reportable Accounts) to IRAS. (According to the Inland Revenue Authority of Singapore (IRAS), more than 90% of Reporting Singapore FIs have filed their annual FATCA and CRS returns on time.)
Put in place a robust compliance approach as well as internal policies, procedures and systems that will ensure effective compliance with FATCA and CRS in Singapore.
Audits & Reviews
Singapore will focus its reviews and audits on FIs posing a higher risk of CRS non-compliance. In assessing the risk of non-compliance by Reporting Singapore FIs, IRAS will consider (among other factors):
Business profile and activities of the Reporting Singapore FI.
The Reporting Singapore FI’s track record in fulfilling its FATCA and CRS obligations.
The Reporting Singapore FI’s track record in other relevant areas of tax and regulatory compliance.
Feedback Singapore receives from its CRS partners in other jurisdictions.
IRAS compliance review strategy includes contacting entities which are not registered as Reporting Singapore FIs to verify their entity classification under FATCA and CRS.
IRAS stated its desire to work together with Singapore FIs to ensure compliance. It has created an online form for Singapore FIs to voluntarily disclose errors made in past FATCA and CRS reporting. However, IRAS emphasized it will issue warning and/or impose penalties on non-compliant FIs.
Anonymous Reporting of Non-Compliant FIs
IRAS created a system for an individual to anonymously report a Singapore FI for failure to comply with FATCA and CRS. The form allows a competitor, employee or other knowledgeable person to provide IRAS details regarding potential non-compliance including “the use of schemes, products and/or structures to circumvent” FATCA and CRS reporting. The online process permits the anonymous party to upload documents supporting the details the party shares with IRAS.
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