21 October 2016
On 10 October 2016, the Inland Revenue Authority of Singapore (IRAS) issued a new e-Tax Guide, “Country-by-Country Reporting (CbCR)”.
In the Final Report on BEPS Action 13 “Transfer Pricing Documentation and Country-by-Country Reporting” published by the OECD in October 2015, a new form of reporting, namely CbCR, was introduced to form part of the transfer pricing documentation to be maintained by MNEs. By issuing this e-tax guide, the IRAS has once again confirmed and moved one step towards adherence to the OECD’s Base Erosion and Profit Shifting (“BEPS”) Action Plan 13.
The e-Tax Guide outlines the purpose and obligation to provide a Country-by-Country Report (CbC Report), the format required and submission process to IRAS. It is relevant to any Singapore multinational enterprise (MNE) group with international operations and an annual group revenue of at least S$1,125 mil.
CbC Reports are supplementary to IRAS’ Transfer Pricing Guidelines which require taxpayers to organise their transfer pricing documentation at Group level and Entity level. The IRAS has stated that the CbC Reports should not be used by taxpayers as a substitute for a detailed transfer pricing analysis of individual transactions and prices based on a full functional analysis and a full comparability analysis.
A CbC Report requires aggregate tax jurisdiction-wide information relating to the global allocation of the income, the taxes paid, and certain indicators of the location of economic activity among tax jurisdictions in which the reporting MNE group operates. The Report also requires a listing of all the entities (including permanent establishments) for which financial information is reported, including the tax jurisdiction of incorporation, where different from the tax jurisdiction of residence, as well as the nature of the main business activities carried out.
Singapore will implement CbCR for Singapore MNE groups from FY 2017 onwards.
For full details, please refer the e-Tax Guide on the IRAS website.
Source: The contents of this article is based on information from the Inland Revenue Authority of Singapore’s (IRAS) website. Visit http://www.iras.gov.sg/ for more information.