AXY v Comptroller of Income Tax: Exchange of Information, Judicial Review, and International Taxation
The Singapore Court of Appeal heard an appeal by AXY, AXZ, AYA, and AYB against the Comptroller of Income Tax's decision to comply with an exchange of information request from the National Tax Service of the Republic of Korea. The Korean tax authority was investigating possible tax evasion by the appellants. The Court of Appeal dismissed the appeal, finding that the Comptroller had acted within his powers and that the appellants had not established sufficient grounds for judicial review.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed
1.3 Case Type
Tax
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal decision on an EOI request from Korea, judicial review threshold, and international taxation principles. Appeal dismissed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Comptroller of Income Tax | Respondent | Government Agency | Appeal Dismissed | Won | Koh Meng Sing Alvin of Inland Revenue Authority of Singapore |
| AXY | Appellant | Individual | Appeal Dismissed | Lost | |
| AXZ | Appellant | Individual | Appeal Dismissed | Lost | |
| AYA | Appellant | Individual | Appeal Dismissed | Lost | |
| AYB | Appellant | Individual | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Tay Yong Kwang | Judge of Appeal | No |
| Steven Chong | Judge of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Koh Meng Sing Alvin | Inland Revenue Authority of Singapore |
| Tan Chee Meng | WongPartnership LLP |
4. Facts
- The National Tax Service of the Republic of Korea (NTS) requested information from the Comptroller of Income Tax.
- The NTS was investigating possible tax evasion involving the four appellants.
- The request was made pursuant to Article 25(1) of the Convention between Singapore and Korea.
- The Comptroller issued production notices to three banks in Singapore for disclosure of banking activities.
- The production notices related to three of the appellants and 51 companies.
- The entire EOI process was conducted covertly without notice to the appellants.
- The appellants filed Originating Summons No 106 of 2014 seeking leave to apply for a prohibiting order and a quashing order.
5. Formal Citations
- AXY and others v Comptroller of Income Tax, Civil Appeal No 161 of 2016, [2018] SGCA 23
6. Timeline
| Date | Event |
|---|---|
| Protocol signed amending the Convention between Singapore and Korea | |
| National Tax Service of the Republic of Korea submitted the Request to the Comptroller | |
| Comptroller wrote to the NTS to clarify certain matters | |
| NTS replied to the Comptroller | |
| Comptroller sought further clarification | |
| Representatives of the Comptroller and the NTS met in Korea | |
| Comptroller issued Production Notice to Woori Bank | |
| Comptroller issued Production Notices to UBS AG and Oversea-Chinese Banking Corporation Limited | |
| Appellants filed Originating Summons No 106 of 2014 | |
| The 1st Appellant acquired Indonesian citizenship | |
| The 1st Appellant commenced adjudication proceedings in Korea with the National Tax Tribunal | |
| The NTT determined that the NTS should re-investigate the issue of the 1st Appellant’s tax residency in Korea | |
| The NTS issued the result of its re-investigation and maintained that its original tax assessment against the 1st Appellant was lawful | |
| The NTT issued its decision on these tax assessments against the 2nd to 4th Appellants | |
| The 1st Appellant filed a complaint with the Seoul Administrative Court seeking to overturn the NTS’s tax assessment | |
| The Judge dismissed the action | |
| The Appellants filed this appeal against the Judge’s decision | |
| The Judge furnished his written grounds of decision | |
| Appeal heard in camera | |
| Grounds of Decision |
7. Legal Issues
- Threshold for Leave for Judicial Review
- Outcome: The court found that the Appellants' case fell short of the threshold for granting leave to commence judicial review proceedings.
- Category: Procedural
- Scope of Comptroller's Role and Duties in Assessing EOI Requests
- Outcome: The court clarified the scope of the Comptroller's role and duties when assessing EOI requests from foreign tax authorities.
- Category: Substantive
- Relevance of Subsequent Objections and Issues in Judicial Review of EOI Requests
- Outcome: The court addressed whether subsequent objections and issues raised after the Comptroller's decision on an EOI request are relevant in judicial review proceedings.
- Category: Procedural
- Compliance with Eighth Schedule Requirements
- Outcome: The court determined that the requirements in the Eighth Schedule had been complied with in this case.
- Category: Substantive
8. Remedies Sought
- Prohibiting Order
- Quashing Order
9. Cause of Actions
- Judicial Review
10. Practice Areas
- Tax Litigation
- International Tax Law
- Administrative Law
- Judicial Review
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| AXY and others v Comptroller of Income Tax (Attorney-General, intervener) | High Court | Yes | [2017] SGHC 42 | Singapore | Cited as the decision under appeal, where the judicial commissioner dismissed the appellants' action. |
| Muhammad Ridzuan bin Mohd Ali v Attorney-General | Court of Appeal | Yes | [2015] 5 SLR 1222 | Singapore | Cited for the requirements to be satisfied before an applicant may be granted leave to commence judicial review proceedings. |
| Public Service Commission v Lai Swee Lin Linda | High Court | Yes | [2001] 1 SLR(R) 133 | Singapore | Cited for the purpose of the requirement to obtain leave for judicial review. |
| Kang Ngah Wei v Commander of Traffic Police | High Court | Yes | [2002] 1 SLR(R) 14 | Singapore | Cited as an example of unmeritorious judicial review cases struck out at the leave stage. |
| Pang Chen Suan v Commissioner for Labour | High Court | Yes | [2008] 3 SLR(R) 648 | Singapore | Cited as an example of unmeritorious judicial review cases struck out at the leave stage. |
| Nalpon Zero Geraldo Mario v Law Society of Singapore | High Court | Yes | [2017] SGHC 206 | Singapore | Cited as an example of unmeritorious judicial review cases struck out at the leave stage. |
| ABU v Comptroller of Income Tax | Court of Appeal | Yes | [2015] 2 SLR 420 | Singapore | Cited for the principles articulated regarding the pertinent features of the pre-2013 Amendments EOI regime. |
| Comptroller of Income Tax v BJX | High Court | Yes | [2013] SGHC 145 | Singapore | Cited for the principle that the EOI regime should allow for the exchange of information between tax administrations to the widest possible extent. |
| Taylor Fladgate & Yeatman Limited v Comptroller for Taxes, acting as competent authority for Jersey | Jersey Royal Court | Yes | [2014] JRC 64 | Jersey | Cited to support the conclusion that the Comptroller has no duty to hold an independent investigation or a mini-trial to test the correctness of statements made by a foreign tax authority. |
| Volaw Trust & Corporate Services Limited and Mr Berge Gerdt Larsen v The Office of the Comptroller of Taxes | Jersey Court of Appeal | Yes | [2013] JCA 239 | Jersey | Cited for the principles enunciated regarding the Comptroller’s decision making process. |
| Comptroller of Income v AZP | High Court | Yes | [2012] 3 SLR 690 | Singapore | Cited for the requirement of foreseeable relevance. |
| Regina v Secretary of State for the Home Department, Ex parte Launder | House of Lords | Yes | [1997] 1 WLR 839 | United Kingdom | Cited for the consideration of changed circumstances and further developments since the time of the impugned decisions. |
| R v Inner London North Coroner, ex parte Touche | English Court of Appeal | Yes | [2001] 2 All ER 752 | United Kingdom | Cited for the coroner’s decision refusing to hold an inquest into the death of the applicant’s wife was under review. |
| Regina (British Broadcasting Corporation and another) v Secretary of State for Justice | English High Court | Yes | [2013] 1 WLR 964 | United Kingdom | Cited for the practical approach taken given that the decision-maker had had the opportunity to consider the new material which arose after he made his decision and had stood by his decision right up to the time of the hearing of the case. |
| R v Secretary of State for the Environment, Ex p Powis | Court of Appeal | Yes | [1981] 1 WLR 584 | United Kingdom | Cited for the assessment of the lawfulness of a decision under challenge by reference to the material that was before the decision-maker at the time it was taken. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Income Tax Act (Cap 134, 2014 Rev Ed) s 105D | Singapore |
| Income Tax Act (Cap 134, 2014 Rev Ed) s 105F | Singapore |
| Income Tax Act (Cap 134, 2014 Rev Ed) s 65B | Singapore |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 53 r 1(3) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Exchange of Information
- EOI Request
- Production Notices
- Foreseeable Relevance
- Eighth Schedule
- Judicial Review
- Tax Evasion
- Competent Authority
- Tax Residency
15.2 Keywords
- Exchange of Information
- Tax Evasion
- Judicial Review
- International Taxation
- Singapore
- Korea
17. Areas of Law
16. Subjects
- Taxation
- Exchange of Information
- Judicial Review
- International Tax Law