Measures to Prevent Misuse of Information Exchanged

Mr Gan Thiam Poh asked the Minister for Finance (a) whether there are any conflicts between existing legislation on personal data protection and banking secrecy and tax information exchanged under the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information for the Common Reporting Standard (CRS) and the Exchange of Country-by-Country (CbC) Reports as established by the Organisation for Economic Cooperation and Development (OECD); and (b) what are the measures in place to safeguard the privacy of individuals and to prevent misuse of the information exchanged.

There is no conflict between existing legislation on personal data protection and banking secrecy, and tax information exchanged under the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information (AEOI) for the Common Reporting Standard (CRS) and the Exchange of Country-by-Country (CbC) Reports.

AEOI under CRS and the Exchange of CbC Reports are internationally agreed standards. These standards are observed by many countries which continue to operate their respective data protection and privacy policies. For example, jurisdictions which have data protection and privacy policies, such as Switzerland and the European Union member states, have also endorsed these internationally agreed standards. Singapore's signing of the multilateral agreements for both standards is in line with our commitment to the internationally agreed standards on tax cooperation against cross-border tax evasion.

The multilateral agreements for AEOI of CRS and CbC reports contain provisions which ensure that the information exchanged is kept confidential and used only for the specific purposes set out in the agreements. Exchange of information that are frivolous or spurious in nature or "fishing expeditions" are prohibited under internationally agreed standards for exchange of information.

For instance, a party to MCAA is to provide information to the other party only if that other party has the legal and administrative framework to ensure the confidentiality of information exchanged and prevent its unauthorised use. Where there is any breach of confidentiality, exchange of information can be suspended.

To implement the internationally agreed standards for the automatic exchange of information and fulfil Singapore's obligations under these agreements, the Income Tax Act was amended in 2013 and 2016. The amendments include the duty for specified persons to provide information to the Comptroller, and for this duty to provide information to prevail over the duty of secrecy provided for under written law or rule of law, including the Banking Act, the Personal Data Protection Act 2012, any contract, or rules of professional conduct. This duty to provide information is also within the exceptions to banking secrecy under the Banking Act and non-disclosure under the Personal Data Protection Act 2012.