From 22 September 2014 to 17 October 2014, the Ministry of Finance (the “MOF”), Monetary Authority of Singapore (the “MAS”) and the Inland Revenue Authority of Singapore (the “IRAS”) jointly conducted a public consultation on proposed regulations and a draft tax guide to help financial institutions in Singapore comply with the US Foreign Account Tax Compliance Act (the “FATCA”).


The FATCA affects financial institutions worldwide and requires those outside of the US to submit information on financial accounts held by US persons to the US Internal Revenue Service (the “IRS”) on a regular basis. Financial institutions that fail to comply will face a 30% FATCA-related withholding tax on certain payments made from the US to them.

The MAS had announced in May 2014 that Singapore and the US had substantially concluded discussions on a Model 1 Intergovernmental Agreement that will facilitate compliance with the FATCA by Singapore-based FIs (the “IGA”). Under the IGA, Singapore-based financial institutions will report information on financial accounts held by US persons to the IRAS, which will in turn provide the information to the US IRS. Once the financial institutions have transmitted the information to the IRAS, their reporting obligations would be deemed met. The IGA is expected to be signed in the fourth quarter of 2014.

Proposed regulations and draft tax guide

In the public consultation exercise, the MOF, MAS and IRAS sought comments on the following:

  • Draft Income Tax (International Tax Compliance Agreements) (United States of America) Regulations 2014 (the “Draft Regulations”), which set out the due diligence and reporting obligations of Singapore-based financial institutions in relation to the IGA; and
  • Draft FATCA e-Tax Guide (the “Draft Tax Guide”) which covers the main aspects of the due diligence and reporting requirements under the IGA by explaining:
    • The financial institutions that must report;
    • The account holders and financial accounts that are subject to reporting;
    • Exempt financial institutions, account holders and financial accounts;
    • The due diligence procedures required to identify the reportable accounts;
    • The information to be reported; and
    • The timelines for reporting the requisite information to the IRAS.

Who is a financial institution?

Under the Draft Regulations, a financial institution refers to:

  • A custodial institution, e.g. a capital markets services licence holder under the Securities and Futures Act (a “CMS licence holder”) for carrying out custodial services for securities;
  •  A depository institution, i.e. a licensed bank, licensed finance company and approved merchant bank;
  • An investment entity, e.g. a CMS licence holder for carrying out the regulated activity of dealing in securities; or
  • A specified insurance company, e.g. a licensed insurer and a designated financial holding company of a licensed insurer.
  • A financial institution will be subject to the reporting and due diligence obligations under the IGA if it is one of the following:
  • An financial institution that is a tax resident in, or incorporated, formed or established under the laws of Singapore, but excludes any branch of the financial institution located outside Singapore; or
  • A branch located in Singapore of a financial institution that is not tax resident in, nor incorporated, formed or established under the laws of Singapore.

Overview of key implementation steps and timelines

A table summarising the key implementation steps under the IGA and another table providing an overview of the relevant timelines can be found in the Draft Tax Guide.

Reference materials

The following materials are available from the MOF website