04 May 2018

The Court of Appeal has provided its written grounds of decision pertaining to an in camera hearing held on 5 September 2017. At the hearing, the Court  affirmed the High Court’s decision to refuse an application made by four foreign individuals (“the Appellants”) that requested to commence a judicial review against the decision of the Comptroller of Income Tax (“the Comptroller”) to issue statutory Production Notices to three banks in Singapore to obtain bank information, following an Exchange of Information (“EOI”) request from South Korea.

This is the first case of an application for permission to commence a judicial review in Singapore to challenge the Comptroller’s issuing of a Production Order for access to information protected under the Banking Act. The decisions of both the High Court and the Court of Appeal have put beyond doubt the Comptroller’s powers and duties at law in responding to an EOI request from a foreign treaty partner. 

Facts of the Case

In September 2013, the Comptroller received an EOI request from the South Korean tax authority concerning 5 individuals and 51 companies. Following clarifications sought and obtained from the South Korean tax authority, the Comptroller issued Production Notices to three banks in Singapore requiring these banks to furnish bank account information in relation to the specified individuals and companies. Consequently, the Appellants filed an application with the High Court for approval to commence a judicial review of the Comptroller’s decision to issue the said Production Notices.

After dealing with numerous interlocutory applications from the Appellants over the course of two years, the High Court dismissed the Appellants’ application in September 2016. The Applicants subsequently appealed against the High Court’s decision. 

After hearing lawyers representing the Appellants as well as lawyers from the Inland Revenue Authority of Singapore (“IRAS”) and the Attorney-General’s Chambers (“AGC”), the Appellants’ appeal against the High Court’s decision was dismissed by the Court of Appeal in September 2017. The Court of Appeal issued its detailed grounds of decision today.

The Court of Appeal highlighted that the Comptroller had made reasonable clarification with the South Korean tax authority where necessary, to ensure compliance of the requirements in the Eighth Schedule of the Income Tax Act (“Eighth Schedule”) that must be fulfilled by a foreign treaty partner for all EOI requests. Based on the facts of the case, the Court of Appeal found that the Comptroller’s decision was based on information provided by the South Korean tax authority over the course of several months which included discussions and materials before the Comptroller was satisfied on the totality of the evidence. The Court of Appeal held that it could not be said that the Appellants had established an arguable or prima facie case of reasonable suspicion that the Comptroller’s decision was tainted by any illegality or irrationality so as to afford grounds for judicial review. The Appellants were ordered to pay costs to the Comptroller and the AGC. 

Please refer to Annex A for the principles laid out by the Court of Appeal that are relevant to EOI administration in Singapore. Link

Singapore is committed to the internationally agreed Standard for EOI for tax purposes (“the EOI Standard”)

Since endorsing the EOI Standard in 2009, Singapore has taken progressive steps to strengthen its framework for international cooperation to combat cross-border tax offences. In April 2013, the Global Forum on Transparency and Exchange of Information for Tax Purposes affirmed through a peer review process that Singapore’s EOI regime is in line with the EOI Standard, both in terms of legal framework and implementation. In May 2013, Singapore’s EOI administration under the EOI Standard was further streamlined with the removal of the requirement of a Court Order for the Comptroller to obtain bank and trust information from financial institutions.

The decisions of both the High Court and the Court of Appeal make clear the legal position on EOI administration and also endorses the Comptroller’s decision to assist in the request from the South Korean tax authority based on its assessment that the request was consistent with the EOI Standard. 

Inland Revenue Authority of Singapore  

Annex A


Relevant principles articulated by the Court of Appeal


In its Grounds of Decision, the Court of Appeal highlighted the relevant principles in relation to the Comptroller’s role in dealing with EOI requests:


(a) The standard for assessing EOI requests remains the EOI Standard of foreseeable relevance. The requirements in the Eighth Schedule of the Income Tax Act help to ensure that the touchstone of foreseeable relevance is satisfied, while ensuring at the same time that relevant information is exchanged to the widest possible extent. The Comptroller must be satisfied that the information specified in the Eighth Schedule has been provided by the foreign tax authority unless he waives any of these requirements.


(b) The Comptroller's assessment of the foreseeable relevance of the requested information is important in determining whether an EOI request amounts to a fishing expedition, that is to say, a speculative request that has no apparent nexus to an ongoing tax inquiry or investigation by a foreign tax authority. If the Comptroller should so conclude, he should not provide the requested information.


(c) The Comptroller is afforded a wide discretion in dealing with EOI requests. In general, he is not expected to go behind the assertions made by a foreign tax authority in an EOI request. The Comptroller is not obliged to embark on an independent investigation or a mini-trial to establish the veracity of the foreign tax authority's statements, nor is he required to delve into questions concerning a foreign jurisdiction's domestic law.

(d) In assessing an EOI request, any doubts which the Comptroller may have as to whether the Eighth Schedule requirements have been satisfied and/or whether the EOI Standard of foreseeable relevance has been met should be clarified with the foreign tax authority. Such doubts may arise on the face of the EOI request itself or from the representations made by the person(s) of interest in response to the request. The Comptroller should make reasonable inquiries to satisfy himself that the requirements in the Eighth Schedule have been complied with and the "foreseeable relevance" requirement met. Where the foreign tax authority provides an explanation to clarify any doubts that may arise, the Comptroller is not obliged to embark on a substantive inquiry into the correctness of that explanation.


(e) Each EOI request is generally assessed at the time it is made. At the material time, there need only be a reasonable possibility that the requested information will be relevant. Subsequent matters going towards the actual relevance of the requested information once it has been provided will generally be immaterial in a review of the Comptroller's initial decision on the EOI request.


(f) However, where a person of interest has not been served with notice of the EOI request and becomes aware of the request only after the Comptroller has made his decision on it, the person of interest should have the opportunity to raise concerns as to the validity of the request within a reasonable time, and the Comptroller should reconsider his initial decision in the light of these concerns if they appear to be legitimate. If necessary, the Comptroller should consult and seek the views of the foreign tax authority on any doubts which may arise from the representations made by the person of interest.