China’s tightening on tax measures related to offshore assets has yet to materially affect Singapore’s wealth management industry, according to the city-state’s regulator.
Earlier this year, China began tightening measures on offshore assets, including the introduction of a trust tax followed by news of intensified enforcement on insurance-related levies. This has ramifications for the private banking industry which provides related services for the nation’s rich, including wealth planning solutions, premium financing, and more.
While this is particularly noteworthy for Singapore, which has increasingly become a favoured hub for offshore Chinese wealth, the Monetary Authority of Singapore (MAS) noted that no major effect has yet to be felt.
“Key banks in the wealth management industry have told MAS that they have not observed significant impact from China’s tax rules thus far, and clients are assessing the implications of China’s new measures and the steps needed to meet their tax obligations,” said MAS chairman, Deputy Prime Minister, and Minister for Trade and Industry (Trade), Gan Kim Yong, in response to questions from the city-state parliament.
“Wealth owners choose Singapore for many key reasons, including our high standards of regulation, strong rule of law, and comprehensive ecosystem of wealth managers and professional service providers. These wealth owners also come from a diverse range of jurisdictions.”
Potential property tax
Some analysts believe that the scope of China’s offshore tax hunt could potentially further widen to include other assets, such as property. However, such efforts could prove to be relatively more difficult compared to traditional financial assets, which are currently being declared under the Common Reporting Standard created by the OECD to avoid cross-border tax evasion.
“To the question about the Common Reporting Standard (CRS), it has been implemented by over 100 jurisdictions worldwide, including major financial centres. The CRS applies to financial account information, and not real estate and immovable property holdings,” Gan said in response to another question about the automatic exchange of information.
