ON JUNE 16 2016, Singapore announced that it is joining the inclusive framework for the global implementation of the base erosion and profit shifting (BEPS) project which was proposed by the Organisation for Economic Co-operation and Development (OECD) and endorsed by the G-20 in February 2016. The BEPS initiative began in the aftermath of austerity measures resulting from the recent global financial crisis. During that period, some sectors - including governments - started to look at the line between legitimate tax planning and aggressive avoidance, and the focus turned to the idea of corporations paying a fair share of taxes.

In response, OECD has led the charge with a comprehensive package of measures developed over two years to change national and international tax laws to close perceived loopholes, clarify financial reporting, and tighten rules on the taxation of certain activities (eg, in digital economies). Effective implementation of the BEPS package requires joint action from tax authorities worldwide; hence there is an invitation to interested countries and jurisdictions to put in place this BEPS implementation framework.

The announcement by Singapore's Ministry of Finance on June 16 reaffirms Singapore's position that it supports the OECD BEPS initiative. Indeed, Deputy Prime Minister, Coordinating Minister for Economic and Social Policies, and Minister for Finance Tharman Shanmugaratnam reiterated that "Singapore is committed to working with the international community to counter artificial shifting of profits, and continues to welcome substantive economic activities. We will be actively involved with the OECD and G-20 in ensuring the consistent implementation of the BEPS standards across all jurisdictions, so as to ensure a level playing field".