Information Exchange Provisions under the New Taiwan–Singapore Tax Treaty — Practical Alerts for Those Who Have Not Reported Overseas Income or CFC Income

Taiwan and Singapore signed the AGREEMENT BETWEEN THE TAIPEI REPRESENTATIVE OFFICE IN SINGAPORE AND THE SINGAPORE TRADE OFFICE IN TAIPEI FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND THE PREVENTION OF TAX EVASION AND AVOIDANCE (the “NEW TREATY”) on December 31, 2025, which entered into force on February 13, 2026.

More than forty years have passed since the signing of the original agreement on December 31, 1981. In addition to adjusting the allocation of taxing rights and treaty tax rates, this revision more importantly incorporates the spirit of BEPS (Base Erosion and Profit Shifting) into the treaty framework and aligns it with international standards of tax transparency.

Among all the amended provisions, Article 26 (EXCHANGE OF INFORMATION) has particularly far-reaching implications for Taiwan tax residents holding assets in Singapore：

• Scope of Information Exchange: Not Limited to Treaty Benefits or Specific Types of Income

According to the NEW TREATY, Article 26(1)：

The competent authorities of the territories shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the territories, or of their subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2.

This provision carries three key implications:

• The exchange of information is not limited to matters concerning treaty benefits;

• It is not restricted to specific types of income;

• As long as the information is foreseeably relevant to the administration or enforcement of “any taxes,” it may fall within the scope of exchange.

  
  

In other words, the exchange of information is not merely for verifying the application of withholding tax rates. It extends to the enforcement needs under each country’s domestic tax laws. If Taiwan income tax, alternative minimum tax, or CFC rules are implicated, such information may fall within the exchange scope.

• Active Information-Gathering Obligation: No Refusal on the Grounds of “No Domestic Tax Interest”

  
  

According to the NEW TREATY, Article 26(4) (excerpt):

If information is requested by a territory in accordance with this Article, the other territory shall use its information gathering measures to obtain the requested information, even though that other territory may not need such information for its own tax purposes. ...

The key feature of this provision lies not merely in prohibiting refusal, but in establishing an active information-gathering obligation. Even if the requested information is not required for the requested State’s own tax purposes, it must nevertheless use its legal investigative and information-gathering powers to obtain the information. In other words, Singapore may not refuse a request on the grounds that the income is exempt from tax in Singapore or is unrelated to its domestic taxation. This reflects the core principle under the OECD standard for exchange of information.

• No Financial Secrecy Defense: Banks and Trust Structures No Longer a Barrier

According to the NEW TREATY, Article 26(5):

In no case shall the provisions of paragraph 3 be construed to permit a territory to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

This provision expressly removes bank secrecy, trust arrangements, or nominee structures as grounds for refusing to provide information. For Taiwan tax residents holding personal bank accounts, investment accounts, or investing through corporate structures in Singapore, this means that financial institution confidentiality obligations no longer constitute a legal barrier to information exchange.

• Temporal Scope of Information Exchange: Procedural Retroactive Design

Article 28 of the NEW TREATY provides that information exchange may apply to relevant tax matters from January 1, 1982 onward. This provision is not limited to tax years after the treaty's entry into force; rather, it adopts a procedural retroactive approach. That is, after the treaty becomes effective, historical corporate records, financial statements, or bank documentation may still fall within the scope of exchange.

It should be clarified that this extends only to the procedural scope of information requests and does not reopen substantive tax assessment periods.

• Practical Implications: Reporting Risks in an Era of Tax Transparency

In the past, it was commonly believed that Singapore's financial system was highly confidential and that overseas income not remitted to Taiwan would be difficult to detect. Under the framework of the New Treaty, such assumptions are no longer sustainable.

Where Taiwan's tax authorities have a reasonable basis in a specific audit case and can demonstrate foreseeable relevance to taxation, they may obtain relevant information through formal exchange procedures. This institutional change has material implications for:

• Individuals who have failed to report CFC income as required;

• Individuals who have not included overseas investment income in their filings;

• Taiwan tax residents holding Singapore bank accounts or corporate structures.

• Conclusion: Global Asset Allocation Remains Viable, but Compliance Standards Are Clearer

The exchange of information under the treaty is not equivalent to automatic disclosure under CRS; it still requires meeting the conditions for a specific request. However, the combined effect of Articles 26 and 28 significantly enhances cross-border audit capabilities.

Cross-border asset allocation is not improper in itself. The true dividing line lies in whether income and structures are properly reported and disclosed in accordance with the law. As tax transparency has become a global trend, Taiwan tax residents holding Singapore accounts or corporate structures should proactively consult professional accountants to review their reporting obligations and structural compliance in order to mitigate tax risks.

References:

• Ministry of Finance, R.O.C. List of ROC Double Taxation Agreements. Ministry of Finance: https://www.mof.gov.tw/singlehtml/191?cntId=63930

• AGREEMENT BETWEEN THE TAIPEI REPRESENTATIVE OFFICE IN SINGAPORE AND THE SINGAPORE TRADE OFFICE IN TAIPEI FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND THE PREVENTION OF TAX EVASION AND AVOIDANCE