Singapore and Australia have agreed to automatically exchange financial data of tax residents of the two countries by September 2018 in an effort to prevent tax evasion.
Offshore wealth centers Singapore, Switzerland, and Hong Kong are among 101 jurisdictions committed to start exchanging information to combat tax evasion by 2018.
“Both jurisdictions are satisfied with the confidentiality rules and data safeguards that are in place in the other jurisdiction to ensure the confidentiality of information exchanged and prevent its unauthorized use,” Australia n Taxation Office and Inland Revenue Authority of Singapore said in a joint statement.
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Last year, Singapore, a trading hub of the world’s largest commodity companies, came under scrutiny from the governments of some resource-producing countries such as Australia who said they suspect the companies are using units in the Southeast Asian financial center to avoid tax.
The companies deny any improper transfer pricing and say they are in Singapore to be closer to Asian clients, to local expertise and trade routes, as the region accounts for a growing share of their business.
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Singapore’s private banking industry is already facing pressure from an Indonesia tax amnesty that comes amid heightened global scrutiny over undeclared wealth.
Singapore and Indonesia have yet to sign a bilateral agreement to share financial data.
Singapore has said previously it would only agree to exchange information with countries that can ensure the confidentiality of the data they provide and offer reciprocity.