Singapore tax system complies with latest OECD proposals

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The OECD (Organisation for Economic Co-operation and Development) announced earlier this month a number of new tax proposals. Those proposals are aimed at preventing aggressive tax planning by multinationals.
The OECD announced the new proposals, estimating that up to $240 billion are lost each year by tax authorities worldwide, which totals almost the 10% of the global corporate tax revenue. This is a result of the multinational firms shifting their profits to low tax jurisdictions.

Actions to put an end to such tax avoidance were taken from the OECD since 2013. The 15 proposals that were announced earlier were the final, aimed at ensuring that profits are taxed where the economic activity of the company took place.

“The level of people that move here, the level of spend, the type of high value and key decisions being made here, supported by functions, assets and risks … if the transfer pricing set up and the substance is correct, it does not really make a change from what we have already been doing in Singapore.”

-As noted by Mr. Luis Coronado, partner at EY.

The final proposals will be discussed by G20 Finance Ministers at their upcoming meeting in Peru.