SINGAPORE Law and Practice Contributed by: Lee Woon Shiu and Cheung Kuan Swan (Catherine), DBS Private Bank
8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis Singapore maintains a comprehensive Mutual Agree - ment Procedure (MAP) programme. The primary legal framework for MAP is established under the MAP arti - cles within Singapore’s DTAs, which largely conform to Article 25 of the OECD Model Tax Convention. These provisions empower competent authorities to address and resolve issues related to the interpreta - tion or application of DTAs and to provide relief from double taxation in situations not expressly covered by the agreements. In addition, the ITA grants the IRAS legal authority to implement these international agree - ments at the domestic level. Singapore’s participa - tion in the MLI further strengthens and streamlines the MAP process across its network of tax treaties. 8.2 Application Deadlines The deadline for submitting a MAP request is generally prescribed by the relevant DTAs. Most DTAs in Singa - pore are based on the OECD Model, which typically allows a three-year period from the initial notification of the action that results in taxation not in accordance with the Convention. Nevertheless, it is essential to review the terms of the specific DTA applicable, as certain treaties may stipulate alternative time limits. The MLI has also impacted the timeframes for MAP requests under covered tax agreements, broadly har - monising them with the standard three-year period from the date of notification. It is advisable for taxpay - ers to consult the pertinent DTA to ensure compliance with all requirements. 8.3 Mandatory Binding Arbitration Mandatory binding arbitration is generally not preva - lent in Singapore’s DTAs. Although the OECD Model Tax Convention includes an arbitration provision, Sin - gapore has typically reserved its position and has not broadly implemented mandatory binding arbitration within its DTA network. While certain DTAs may fea - ture non-binding or voluntary arbitration provisions, these are exceptions rather than the norm. The inclusion of mandatory binding arbitration across all of Singapore’s DTAs remains limited. Select newer or renegotiated treaties may incorporate arbitration
• OECD International Compliance Assurance Pro - gramme (ICAP) – since 2021, Singapore has active - ly participated in ICAP, a voluntary programme designed for multinational enterprises (MNEs) seeking greater certainty on transfer pricing and permanent establishment matters. This initiative facilitates multilateral tax risk assessment and assurance, promoting efficiency and certainty for both taxpayers and tax authorities. • Joint or Simultaneous Tax Audits – where appro - priate, Singapore collaborates with other jurisdic - tions to conduct joint or simultaneous tax audits, particularly in complex cross-border MNE cases. Although these audits are less frequent than information exchanges, they enable a more holistic approach to addressing tax issues and enhance audit effectiveness. • BEPS Inclusive Framework – as a member of the OECD/G20 Inclusive Framework on Base Ero - sion and Profit Shifting (BEPS), Singapore actively contributes to global initiatives aimed at combating tax avoidance. • Country-by-Country Reporting (CbCR) – in align - ment with the OECD BEPS project, Singapore has implemented CbCR, which enables the collec - tion and exchange of high-level reports on MNE groups’ worldwide activities and tax positions with relevant tax administrations. • Peer reviews – Singapore participates in peer reviews conducted by the Global Forum on Trans - parency and Exchange of Information for Tax Purposes to ensure adherence to international standards on the exchange of information. • Capacity building – Singapore is also committed to capacity-building efforts, supporting other juris - dictions in strengthening their tax administration capabilities. Together, these initiatives demonstrate Singapore’s commitment to fostering transparency, enhancing compliance, and upholding international tax stand - ards, beyond the use of Mutual Agreement Procedures (MAPs) and Advance Pricing Agreements (APAs).
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