If your institution serves U.S. clients, or if you are an American citizen living in Singapore, you face reporting obligations that carry penalties reaching S$10,000 or more, plus potential imprisonment for serious violations. If you miss your filing deadline, you risk exclusion from U.S. financial markets through the 30% withholding tax.
The Foreign Account Tax Compliance Act, enacted in 2010 to combat offshore tax evasion, creates two distinct compliance streams. Financial institutions must identify and report U.S. account holders to the Inland Revenue Authority of Singapore (IRAS) annually. U.S. citizens and residents must separately disclose their foreign assets, including Central Provident Fund Board (CPFB) accounts, on their personal tax returns.
Singapore operates under a reciprocal Model 1 Intergovernmental Agreement, effective 1 January 2021. IRAS acts as an intermediary, collecting data from local institutions and transmitting it to the United States’ Internal Revenue Service (IRS). The most significant development for 2025 is IRS Notice 2024-78, which extends relief for missing U.S. Taxpayer Identification Numbers through 2027.
This article explains what it means for your compliance programme and which deadlines matter right now.
Key Takeaways
- Singapore operates under a reciprocal Model 1 Intergovernmental Agreement with the U.S., requiring financial institutions to report U.S. account holders to IRAS annually.
- Non-compliance risks include penalties under Singapore’s Income Tax Act and exclusion from U.S. financial markets via a 30% withholding tax.
- Financial institutions have until 2027 to comply with missing U.S. Taxpayer Identification Numbers (TINs) for pre-existing accounts, provided they meet specific conditions like reporting dates of birth and conducting annual TIN requests.
- The annual reporting deadline for FATCA data is 31 May 2025, with penalties for late or inaccurate submissions.
- InCorp provides guidance on FATCA compliance, helping financial institutions and individuals navigate complex reporting requirements and avoid penalties.
FATCA’s Core Framework in Singapore
The Singapore-U.S. Reciprocal Agreement
Singapore signed its first FATCA agreement in 2014, but that version was non-reciprocal – Singapore reported U.S. account data without receiving comparable information in return. The reciprocal Model 1 IGA signed on 13 November 2018 changed this dynamic, taking effect on 1 January 2021.
The agreement is embedded in Singapore law through Part 20B of the Income Tax Act 1947 and the Income Tax (International Tax Compliance Agreements)(United States of America) Regulations 2020. IRAS serves as Singapore’s designated Competent Authority, centralising all FATCA administration. This government-to-government structure resolves the legal conflict that would otherwise force institutions to choose between U.S. reporting requirements and Singapore’s banking secrecy laws.
How Does the System Work?
Singapore’s financial institutions identify accounts held by U.S. persons through systematic due diligence. They report this data annually to IRAS (not directly to the IRS) by 31 May each year. IRAS consolidates the information and transmits it to American tax authorities.
The enforcement mechanism is severe: non-participating institutions face a 30% withholding tax on U.S.-source payments. This penalty makes compliance economically necessary for any institution wanting access to U.S. financial markets.
The definition of Foreign Financial Institution extends beyond traditional banks. It captures custodial institutions, investment entities like hedge funds and private equity funds, and insurance companies offering cash value products. This broad scope closes potential loopholes and brings Singapore’s entire financial services sector into the reporting framework.
Extended TIN Relief
IRS Notice 2024-78: Three-Year Extension
Obtaining U.S. TINs (typically Social Security Numbers for individuals) for clients who opened accounts before FATCA took effect has created persistent operational headaches. Many account holders do not know their Social Security Numbers. Others refuse to provide them, viewing the request as intrusive.
IRS Notice 2024-78, issued in late 2024, grants relief that matters. Singapore Financial Institutions will not face “significant non-compliance” designations solely for missing TINs on pre-existing reportable accounts during 2025, 2026, and 2027 reporting years.
The relief comes with conditions:
- Obtaining and reporting the date of birth of each account holder for whom a U.S. TIN is missing.
- Making an annual written request to the account holder to obtain the missing TIN.
- Before filing its annual report, conducting a search of its electronically searchable data for any missing U.S. TINs.
Singapore Financial Institution Compliance Requirements for 2025
Registration Process
Registration happens in two stages. First, register through the IRS FATCA Registration Portal. The IRS issues your Global Intermediary Identification Number (GIIN) – your 19-character passport into the FATCA system. This GIIN appears on the monthly IRS foreign financial institutions (FFI) List, which withholding agents check before making payments.
Second, provide your FATCA registration details to IRAS through the “Apply for CRS Registration” e-Service. If you skip this step, you can’t file returns through the myTax Portal.
Due Diligence Obligations
You must systematically review customer information for U.S. indicia. These indicators trigger reporting requirements:
- U.S. place of birth
- U.S. residential address, mailing address, or telephone number
- Standing instructions transferring funds to U.S. accounts
- Power of attorney granted to someone with a U.S. address
This is not a one-time check. When an account holder updates their address to include U.S. details, you must re-validate the account’s status. In essence, changes in circumstances trigger new due diligence requirements.
You can rebut U.S. presumptions with documentation: a self-certification of non-U.S. status plus a non-U.S. passport or government-issued identification. Get the paperwork right or accept the reporting obligation.
Annual Reporting Deadline and Process
As mentioned earlier, 31 May 2025 is your deadline for reporting year data. IRAS allows for XML files for volume reporting or fillable PDF version 2.0 for smaller account numbers. File nil returns even when you have zero reportable accounts. Liquidating entities use the advance reporting year function before deregistration.
Penalties and Enforcement
IRAS Penalties Under Income Tax Act
IRAS enforces compliance through tiered financial penalties established under Singapore’s Income Tax Act. The increased penalties took effect on 16 November 2021, signalling stronger enforcement:
| Offence | Governing Section | Penalty |
|---|---|---|
| Failure to report all reportable accounts or file nil return | Section 105M(1) |
|
| Failure to perform due diligence on financial accounts or comply with other FATCA requirements | Section 105M(1B) |
|
| Provision of false or misleading information to IRAS | Section 105M(3) | Fine up to S$10,000 and/or imprisonment for up to 2 years |
Source: IRAS FATCA Compliance
IRAS offers a voluntary disclosure process for institutions discovering errors in past returns. We recommend you use it before IRAS finds the mistakes to avoid penalties.
Ultimate Risk
Beyond Singapore’s domestic penalties sits the U.S. consequence: Non-Participating FFI designation. This triggers the 30% withholding tax on U.S.-source payments, effectively excluding you from U.S. markets. The dual enforcement environment (Singapore penalties plus U.S. market exclusion) makes non-compliance commercially unviable.
Where to Next With InCorp
The 2025 TIN relief extension provides breathing room, but FATCA compliance remains complex. Financial institutions face dual reporting streams) U.S. account holder obligations and individual taxpayer requirements) each carrying substantial penalties for errors. Looking ahead, CARF and CRS 2.0 implementation will expand your reporting scope significantly by 2028.
InCorp’s tax services team has guided businesses through Singapore’s regulatory requirements for years. We can assist with tax advisory for both companies and individuals. Contact us today for guidance and more!
FAQs about Foreign Account Tax Compliance Act (FATCA)
What is FATCA and how does it affect Singapore financial institutions?
- FATCA (Foreign Account Tax Compliance Act) is U.S. legislation requiring Singapore Financial Institutions to identify and report accounts held by U.S. persons to IRAS annually. Non-compliance triggers penalties up to S$10,000 and potential 30% withholding tax on U.S.-source payments. Singapore operates under a reciprocal Model 1 IGA effective 1 January 2021, with IRAS acting as intermediary between local institutions and the IRS.
What is IRS Notice 2024-78 and how does it help Singapore institutions?
- IRS Notice 2024-78 extends relief for missing U.S. Taxpayer Identification Numbers through reporting years 2025, 2026, and 2027. Singapore institutions won't be deemed "significantly non-compliant" solely for missing TINs on pre-existing U.S. reportable accounts, provided they report account holders' dates of birth, make annual written TIN requests, and conduct electronic searches before filing.
Do U.S. citizens in Singapore need to report their CPF accounts?
- Yes. The IRS considers Central Provident Fund accounts as foreign financial assets. U.S. citizens and residents in Singapore must include CPF values when determining if they meet Form 8938 filing thresholds ($200,000 year-end or $300,000 anytime for single filers abroad). CPF earnings are generally taxable by the U.S. annually, as no U.S.-Singapore tax treaty provides deferral.
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