Singapore to incorporate BEPS framework for tax reporting

30 June 2016

As announced by the Ministry of Finance on 16 June 2016, Singapore will join the inclusive framework for the global implementation of the Base Erosion and Profit Shifting (BEPS) Project.

The OECD had agreed on the new framework in February 2016 for the implementation of the BEPS Project for which Singapore, as BEPS Associate, played an active role in giving input to the design of the BEPS Project in the development of international standards related to BEPS and in the review and monitoring of the implementation of BEPS measures. The minimum standards of the BEPS Project focuses on the areas of countering harmful tax practices, prevention of tax treaty abuse, country-by-country reporting and improvements in cross-border tax dispute resolution.

Under the guidelines of the BEPS Action Plan 13,”Transfer Pricing Documentation and Country-by-Country Reporting” finalised in October 2015, a three-tiered approach should be applied to transfer pricing documentation as follows:

  • A Master file –  to provide tax administrations with high-level global information regarding the overall global business and transfer pricing policies of the Multinational Enterprises (MNEs) that are adopted by the Group for each category of related party transaction.
  • A Local file – akin to transactional transfer pricing documentation where information on related party transactions, the transfer pricing method and third party transactions are included.
  • Country-by–country report (CbCR) – requiring tax jurisdiction’s allocation of income, taxes paid, economic activity and taxes accrued on an annual basis, in a previously set format, for each tax jurisdiction in which they conduct business.

Although all MNEs are to prepare the Master and Local files, the CbCR is only required provided the Group’s revenue meets the revenue threshold.

In line with these changes, IRAS has committed to the implementation of CbCR for financial years beginning on or after 1 January 2017 for MNEs whose ultimate parent entities are in Singapore and whose group turnover exceeds S$1,125m.

These enterprises are required to file the CbCRs with the IRAS within 12 months from the last day of their financial year. IRAS will then exchange these CbCRs with jurisdictions that Singapore has entered into bilateral agreements with for automatic exchange of CbCR information, having established that they meet the following conditions:

  • These jurisdictions have a strong rule of law and can ensure the confidentiality of the information exchanged and prevent its unauthorised use.
  • There must be reciprocity in terms of the information exchanged.

IRAS will be consulting the MNEs and releasing implementation details of CbCR processes by September 2016.

Source: IRAS

Local Tax Compliance sets new records

2 September 2013

More taxpayers, both individual and corporate, filed and paid their 2012 taxes within the stipulated deadlines. This was highlighted in IRAS’ Annual Report for Financial Year 2012/13. 90% of GST-registered businesses also filed their returns promptly. Additionally, tax arrears dropped to a record low of 0.79% of the total net tax assessed. Commissioner of Inland Revenue Dr Tan Kim Siew attributed this to continuing efforts by the tax authority to encourage voluntary compliance.

Other improvements in the tax scene include:

  • Extending the Auto-Inclusion Scheme for employment income to 36,000 employers in 2013’s tax-filing season, up from 27,000 employers in 2012. A total of 1.13 million taxpayers enjoyed the No-Filing Service in 2013, compared to 963,000 in 2012.
  • Streamlining the tax reporting process for small companies with the simplified Form C-S. 63% of the small companies halved the average time taken to file their 2012 tax returns.
  • Enabling more small and medium enterprises to benefit from the Productivity and Innovation Credit (PIC) scheme. In 2012, 44,000 companies gained from the PIC scheme, up from 36,400 companies in 2011.
  • Providing one-stop access to official tax statistics thus allowing interested parties to retrieve data, study trends and conduct meaningful analyses.

Source: Inland Revenue Authority of Singapore

MOF seeks public feedback on the Goods and Services Tax (GST)

10 August 2013

The Ministry of Finance is conducting a public consultation on the draft GST (Amendment) Bill 2013 from 5 to 25 August 2013.

The proposed amendments to existing tax policies and tax administration comprise:

(a) The Comptroller of GST and authorised persons may confiscate goods and arrest persons in cases where Tourist Refund Scheme fraud is suspected;

(b) When there is a change of local agent between the time of import and the subsequent supply of goods, the new local agent is liable for GST;

(c) The Inland Revenue Authority of Singapore (IRAS) may release anonymised information to Government and Statutory Boards for statistical or research purposes, or disclose information concerning professional misconduct to the relevant professional body for their investigation;

(d) If a person, who had been permitted under the Approved Refiner and Consolidator Scheme to buy goods without GST, was subsequently found to be ineligible for the benefit, he has to pay back the GST; and

(e) The term “refine”, in the Approved Refiner and Consolidator Scheme, includes casting precious metals into a different form.

Additionally, the Bill includes the following non-tax policy changes:

(a) IRAS may share information with the Commercial Affairs Department and the Singapore Police Force for investigations relating to money laundering of tax crimes proceeds without a court order.

(b) The tax authority may offset outstanding taxes from Government payments to the taxpayer under any law, contract or scheme.

For full details, please refer to the Ministry of Finance’s website or the REACH consultation portal.

Source: Ministry of Finance

IRAS issues e-Tax Guide, “Tax Treatment of Employee Stock Options And Other Forms of Employee Share Ownership Plans (Second Edition)”

8 July 2013

This e-Tax Guide provides details on the tax treatment of the gains and profits derived from employee share options (“ESOP”) and other forms of Employee Share Ownership (“ESOW”) plans as well as the relevant administrative requirements.

It also covers details of Qualified Employee Equity-based Remuneration Scheme (“QEEBR Scheme”), the “deemed exercise” rules and tracking options applicable to gains from ESOP and ESOW plans.

It would be relevant to individuals who are granted the shares under ESOP or ESOW plans and also companies which grant shares under these plans to any individual by reason of any office or employment held by the person.

In this second edition, revisions were made to include the categories of affected employees (paragraph 13.1) and to provide clarity when an individual is deemed to derive the final gains under the deemed exercise rule (paragraph 14.2).

The second edition replaces the first edition published on 29 June 2012.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website. Visit for more information.