Have come across this interesting article regarding Tax implication and reporting. As I am not a Tax expert, please approach your Tax Consultant for expert advice.
From 2010, the largest economy in the world, the US, has formulated and implemented a tax regime called Foreign Account Tax Compliance Act (FATCA).
The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI) regarding financial accounts on a global level, between tax authorities, which the Organisation for Economic Co-operation and Development (OECD) developed in 2014. And countries started reporting in phrases from 2017 and 2018.
Since 2019, the world’s 2nd largest economy – China, has further pushed for a revised tax code intended to lower the burden on the poor and the middle class by making the rich pay more. Chinese citizens have been obliged to pay taxes on their global income for many years. But for those working abroad, it hadn’t been generally enforced. Largely, tax experts say, that’s because there wasn’t a detailed legal basis nor guidelines for co-ordination.
In January 2020, Chinese authorities issued instructions on how to comply with the tax law while abroad – a move that caught many Chinese expats off guard. Chinese state-owned enterprises in Hong Kong started telling workers who had transferred from the mainland to declare their 2019 income so they could pay taxes back home. Employees in other locations such as Singapore got the same message.
China has started automatically exchanging information with dozens of jurisdictions – including Hong Kong and Singapore – about bank accounts belong to people subject to taxes in each member country.
Facing a slowing economy and ever-tighter budget, China has turned its attention to generating more revenue by taxing its citizens living and working outside the country — similar to how the U.S. targets Americans abroad. The drive could undermine the appeal of a post in an expensive city such as Hong Kong or Singapore for thousands of bankers and other white-collar professionals from the mainland. But a lot of details are still murky.
Will there be an implication to Singapore economy, particularly the Banking sector?