Singapore and Indonesia are working on how to automatically exchange information on tax matters with jurisdictions around the world without putting legitimate client privacy in danger, Singapore’s Ministry of Finance has said.

Singapore and Indonesia are working on how to automatically exchange information on tax matters with jurisdictions around the world without putting legitimate client privacy in danger, Singapore’s Ministry of Finance has said.

Work to create a framework for automatic exchange of information – or AEOI - was highlighted during a meeting between Singapore’s deputy prime minister and finance minister Tharman Shanmugaratnam and Indonesia's finance minister, Bambang Brodjonegoro, according to a statement from Singapore’s finance ministry.

Such an exchange of data agreement has been created by the Paris-headquartered Organisation for Economic Cooperation and Development.

Indonesia, which held national elections in the summer, will implement such an exchange of information accord by 2017, followed by Singapore a year later, but Singapore wants to make sure there's ample protection for confidentiality as well as reciprocity in data swop, the Ministry of Finance in Singapore said.

Singapore’s MOF said it will implement such a system if it is “adopted in all key financial centres in Europe and Asia, to avoid regulatory arbitrage” and said that the AEOI agreement must be carried out “within a robust framework of law to protect taxpayer confidentiality and ensure that the information is used properly”. “This is particularly important as AEOI entails the transmission of sensitive taxpayer information which should be safeguarded; and there must be reciprocity with any future AEOI partners in terms of information exchanged,” it said

At present, Singapore’s priority is to implement the US Foreign Account Tax Compliance Act (FATCA Act) Intergovernmental Agreement, before it takes on additional AEOI obligations.