Singapore Emerging attractive as Tax Havens are "Grey Listed" by Regulations

PR Log (Press Release) – Oct 09, 2009 – The organization for Economic Co-operation and development’s ( OECD) has "grey listed" certain jurisdictions that were once deemed as tax havens. They include Monaco and Liechtenstein. Bankers have orchestrated that with regulations   for offshore financial centers increasing it appears that the number of players in the offshore financial field will diminish particularly if they seek to function only as a venue to park assets.

At a private Banking summit it was stressed that a greater scrutiny was being imposed by developing countries on offshore financial centers   who operate only as a tax haven and a place to hide money. Now these jurisdictions are at a risk of loosing their businesses. The OECD and other regulatory parties will force these "grey listed" jurisdictions to divulge a lot more information.

In the light of the current situation with these tax havens  being "grey listed", Singapore has merged as an attractive place to do business because of its sound tax policies .The tax rates are attractive to both local and foreign entrepreneurs alike and it continues to slide down. Singapore practices territorial and single tier tax system. It’s low tax rates and impressive infrastructure has proved extremely attractive to global trotting businessman.

The tax residence of Singapore is dependant on the control and management of its business. A company is non tax resident if the control and management is exercised from Singapore and non resident if the control is vested with an overseas parent company.

Though the basis of taxation is similar in both the categories a resident company enjoys:

•    Benefits conferred under the Avoidance of Double Taxation Agreements (DTA) that Singapore has concluded with treaty countries.
•    Tax exemption on foreign-sourced dividends, foreign branch profits, and foreign-sourced service income under section 13(8) of the Income Tax Act.
•    Tax exemption scheme for new start-up companies

A non resident company though not open to Singapore tax benefits stated above  is not liable to be taxed for income tax received out of Singapore. With its single tier tax system profits earned by the Singapore business are taxed only once. Further there are no taxes on dividends received in a Singapore Company and no capital gains tax. On the whole Singapore offers a world class infrastructure excellent business opportunities and an attractive tax system.

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