20 Jun 07
Tax system does not force ex-pats to report account details to home tax authority
The former British colony of Singapore is becoming a haven for tax dodgers to hide their offshore earnings, according to website www.citywire.co.uk
It reported that while Singapore has a stable banking system it has not signed the EU Savings Directive which obliges banks paying interest on ex-pat accounts to report the details to the customer’s home tax authority.
Furthermore, research by foreign exchange dealer Currencies Direct found that the majority of its transfers are made by UK residents looking to emigrate or purchase property abroad.
Tax dodgers switch to Singapore
20 Jun 07
While the tax man has largely been unsuccessful in persuading tax dodgers with offshore bank accounts to own up – only 25,000 of an estimated 400,000 who have an undeclared tax liability have so far taken advantage of the amnesty – the real tax frauds have, it seems, been hotfooting it to Singapore.
The former British colony has a stable banking system but has not signed the EU Savings Directive which obliges banks paying interest on ex-pat accounts to report the details to the customer’s home tax authority.
According to foreign exchange dealer Currencies Direct increasing numbers of British buyers are taking advantage of Singapore’s property up swing, pushing the country into the top ten of Currencies Direct’s Global Emerging Markets Index.
The Index is based on the number of foreign exchange transfers undertaken by Currencies Direct to emerging market regions in any given month. The majority of the Currencies Direct transfers are made by UK residents looking to emigrate or purchase property abroad.
No doubt many of those who have transferred funds, ostensibly to buy property, have simply stashed it in a deposit account in a Singapore bank. But even if they have bought property, it is now safe from the hands of the UK tax man or any other EU fiscal authority.
Currencies Direct maintains that the property boom is partly led by Singapore’s efforts to re-brand itself as a premier world city making it an increasingly attractive investment option for Brits looking to capitalise on overseas property.
“With its huge modern port and first-class infrastructure it is fast becoming the preferred location for businesses in Asia, further attracting foreign investment and fuelling rising property values,” the report said.
“Property prices in Singapore rose by about 10% last year and it looks like this is just the beginning of a long growth cycle within the market,” said Mark O’Sullivan, head of trading at Currencies Direct. “As more and more savvy Brits begin to recognize Singapore’s investment potential, I fully expect to see the country climb higher up the league table in the near future.”
Countries in the top ten emerging property hot spots are Dubai at pole position – also with a stable banking system and not a signatory to the EU Savings Directive – closely followed by Bulgaria, Turkey, India, Hungary, Czech Republic, Poland, UAE (excluding Dubai), Singapore and Thailand.