Transfer Pricing

SSA Young Executives Group
17 May 2017

Chintan Shah


Maritime Singapore

Employs more than
Maritime More than 5,000 maritime
establishments 170,000 people
Is a lifeline of the Singapore

One of the world’s busiest
Contributes 30.9 million*
to 7% of
container hub TEUS of container handled

Singapore’s ports
GDP *2015 figures

5th Over130
45.2 million* largest ship registry in the world international shipping groups in
tonnes of bunker fuel sales Singapore

*2015 figures

Source : MPA

The Singapore Maritime Cluster


Bunkering Ship Societies

Ship Ship
logistics Mgmt

R&D /
Training Design
owning/ Shipping
Education Finance

HR/ Legal

IT/ Admin
Legal &

Broking 3
Source : MPA

Transfer pricing – Why it matters to Singapore
Shipping Companies

• Maritime and Port Authority of Singapore (“MPA”) – while granting Maritime Sector Incentive, specifically
requires the company to prepare transfer pricing documentation as part of its terms and conditions:

• MPA while granting Maritime Sector incentive adopts the arm’s length principle as part of its terms and
conditions while transacting with the related parties :

• To the best of our knowledge, IRAS has set up new transfer pricing team who exclusively reviews the related
party transactions.


media and nongovernmental organisations on the international tax profile of MNEs – Now everyone knows what we do! − More information sharing between governments − Public questions about the fairness of tax burdens − Determination of transfer price becomes imperative − Need for ‘arm’s length’ pricing principal 5 .Introduction to Transfer Pricing − Globalisation and regionalization .Rise to a large number of multinational enterprises (MNEs) − More than 60% of the world trade takes place within multinational enterprises leading to complex issues emerging from transactions entered between enterprises belonging to same Group − General tendency to control profits and transfer the same to low tax heavens Need for regulation to monitor the possible erosion of tax base − More attention by governments.

Parent Co.Why Transfer Pricing ? • To ensure fair share of tax revenue for various jurisdictions. Dubai Sub Co. Singapore Market price – S$ 120 Cost price – S$ 150 Sale price S$ 150 Tax haven Avoidance of tax on S$ 30? To prevent shifting out of profits by manipulating prices 6 .

Price between unrelated parties the transfer pricing may be in uncontrolled conditions is different than the price that known as the “arm’s length” price would have been agreed between (ALP). the price at which between related parties.What is Transfer Pricing ? When two related entities enter Transfer pricing refers to the into any related parties pricing of the transactions transactions. 7 . unrelated companies. they undertake the transaction is ‘transfer price’. Due to special relationship between the related companies.

• Intangibles • Many countries have issued formal • Loans rules regulating transfer pricing practices. • Regulations. prescribe stringent documentation requirements and Resident Resident penalty provisions for non- compliance.Arm’s Length Principle ? Related Independent Transfer pricing for tax Parties entity purposes is Transactions • Goods • Governed by local jurisdictional • Services authorities. Transfer Arm’s Price length price 8 .

900 transfer price Global ETR 19% 9 .000 10.Transfer pricing example Transfer pricing planning opportunity Parent (Country A) Sub (Country B) Consolidated Total profit reported on tax 7.100 transfer price Global effective tax rate 31% (ETR) Effect of transfer pricing change on ETR Total profit after using 3.000 3.000 10.000 transfer pricing to shift 4000 of income Tax rate 40% 10% Tax liability after change to 1.000 return Tax rate 40% 10% Tax liability before change to 2800 300 3.000 7.200 700 1.

000 10.000) country A of 4.800 700 3.000 (increase in profits) by (3.Transfer pricing example Exposure to double taxation Parent (Country A) Sub (Country B) Consolidated Total profit reported on tax 3.000 return Tax rate 40% 10% Tax liability before Country A 1.000 + 4.000 7.200 700 1.000 10.500 transfer pricing adjustment (penalties and interest not included) Global ETR 35% 10 .900 transfer pricing adjustment Global ETR 19% Effect of transfer pricing change on ETR Total profit after adjustment 7.000 (assumes no correlative relief in B) Tax rate 40% 10% Tax liability after Country A 2.000 7.

Eliminate double taxation. allocation of income and valuation. and . • A MNE Group may exploit the opportunity to shrink the overall tax burden of the group through either under-charging or over-charging the associated entity for intra-group trade: Loss • A group may transfer the tax loss of an associated enterprise in a jurisdiction where losses cannot be carried forward beyond the prescribed time limit to a jurisdiction without such restrictions so as to fully utilize the same. Transfer pricing rules are essential for countries (for Tax administration and Tax Payers) in order to . • Reduction of taxation not the only factor contributing to the transfer pricing policies and practices of a MNE Group. • In some cases loss may be transferred to take the benefit of deductions as quickly as possible. .Enhance cross border trade 11 .Basic issues underlying Transfer Pricing • Cross border tax situations involve issues related to jurisdiction.Protect their tax base.

What do you think of this situation? Multinational Country A Country B Assets Functions Risks Profits $$ $$$$$$$$$$ Is the profit recognized commensurate with value created? 12 .

the determination of risk for transfer pricing analysis purposes also is aligned with that under BEPS Actions 8-10.IRAS subscribes to the BEPS principle that profits should be taxed where the real economic activities generating the profits are performed and where value is created. More functions higher expected return More complex functions higher expected return More assets owned higher expected return Intangible assets owned higher expected return More risks assumed higher expected return Alignment of profits and value creation . Accordingly. assets owned and risks assumed by a given entity.Concept . 13 .Economic substance Transfer pricing regulations assumes expected returns are positively and casually related to functions performed.

Global Tax Revolution Global Tax Revolution • Currently MNCs are facing a number of new challenges. including: Perception that Loss of trust between Loss of trust between MNCs are not paying tax authorities and tax authorities in fair share of taxes business different countries • This new global tax environment has resulted in the following actions – a Global Tax Revolution: Change in tax Changing authorities’ behaviours of approach OECD’s BEPSto OECD’s BEPS tax authorities interpretation project project re tax treaties of tax law and and tax laws tax treaties 14 .

The OECD BEPS initiative • The Organisation for Economic Co-operation and Development (OECD) transfer pricing guidelines. is widely acknowledged by tax authorities around the globe to determine transfer pricing. resulting in little or no overall corporate tax being paid” – OECD FAQs • Transfer pricing is central to the OECD’s initiative to combat BEPS. with many multinational companies coming under the spotlight of tax administrations 15 . Transfer pricing now presents not just a financial risk but also a reputational risk. • What is Base Erosion and Profit Shifting (BEPS)? “BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits “disappear” for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low.

BEPS objectives : a new global tax environment 16 .

17 .Singapore Joins Inclusive Framework as ‘BEPS Associate’ for implementing measures against BEPS • Singapore government is on record that it supports the BEPS project and it is clear that BEPS-related considerations are high on its agenda.

Singapore will consider whether to join the instrument after it is finalised and ready for jurisdictions to sign. 2. Our tax incentives are legislated and granted for defined periods of time on qualifying activities. As with many other jurisdictions. As an outcome of these reviews. Singapore Joins Inclusive Framework as ‘BEPS Associate’ for implementing measures against BEPS Singapore’s position on the four BEPS minimum standards 1. A number of our bilateral tax treaties contain anti-treaty shopping provisions to prevent abuse. Countering harmful tax practices. Singapore is currently part of a group of jurisdictions working together under the aegis of the OECD and G20 to develop a multilateral instrument for incorporating BEPS measures into existing bilateral treaties to counter treaty abuse. Source : Events/Newsroom/Media-Releases-and-Speeches/Media-Releases/2016/Singapore-Joins-Inclusive-Framework-for-Implementing-Measures-against-Base-Erosion-and-Profit-Shifting--BEPS-/ 18 . Preventing treaty abuse. We regularly review our tax incentives to ensure that they remain relevant and competitive. Non-qualifying activities of incentivised companies are taxed at the prevailing corporate tax rate. Incentive recipients would have to anchor substantive operations in Singapore and contribute meaningfully to the growth of the overall economy. Singapore does not condone treaty shopping. Singapore uses tax incentives to promote investment in certain areas of the economy. we have allowed some tax incentives to lapse and refined several others over the years.

-Second. IRAS will exchange CbC reports with jurisdictions that Singapore has entered into bilateral agreements with for automatic exchange of CbCR information. Source : Events/Newsroom/Media-Releases-and-Speeches/Media-Releases/2016/Singapore-Joins-Inclusive-Framework-for-Implementing-Measures-against-Base-Erosion-and-Profit-Shifting--BEPS-/ 19 . these jurisdictions have a strong rule of law and can ensure the confidentiality of the information exchanged and prevent its unauthorised use.125 million[6]. This will complement the other BEPS minimum standards and ensure that taxpayers have access to effective and expedient dispute resolution mechanisms under bilateral tax treaties. there must be reciprocity in terms of the information exchanged. Singapore adheres to the internationally agreed arm’s length principle[5]. As a BEPS Associate. 4. IRAS has been active in engaging foreign tax authorities to resolve cross-border tax disputes via the mutual agreement procedure provided in our bilateral tax treaties[8]. Enhancing dispute resolution. Transfer pricing documentation. We will commit to implement CbCR for financial years beginning on or after 1 Jan 2017 for multinational enterprises whose ultimate parent entities are in Singapore and whose group turnover exceed S$1. Singapore Joins Inclusive Framework as ‘BEPS Associate’ for implementing measures against BEPS 3. These enterprises are required to file the Country-by-Country (CbC) reports with the Inland Revenue Authority of Singapore (IRAS) within 12 months from the last day of their financial year[7]. having established that they meet the following conditions: -First. IRAS will consult Singapore-headquartered multinational enterprises further on the implementation details of CbCR. Singapore will work closely with other jurisdictions to monitor the implementation of minimum standards on dispute resolution developed under the BEPS Project. and release these details by September 2016.

IRAS released its fourth edition of transfer pricing general anti avoidance guidelines provision 20 .Transfer Pricing in Singapore 2006 2008 2009 2010 2015 2016 • Introduction • Transfer • Transfer • Section 34D • Revised • Revised transfer pricing of transfer pricing pricing introduced – transfer guidelines (3rd edition) pricing consultation guidelines for transfer pricing • OECD’s Inclusive guidelines process related party pricing is now guidelines (2nd framework for loans and part of the edition) implementing measures • Administrative related party Income Tax against BEPS guidance on services Act • Introduced to file CbC advance report for Singapore pricing MNEs agreements • New form for disclosure RPT • Enacted Common Reporting Standard • New E-tax guide on In 2017.

Transfer Pricing in Singapore • The most striking change is the explicit requirement for Singapore taxpayers to prepare contemporaneous transfer pricing documentation to support the pricing of transactions with related parties • Contemporaneous . and including up to the time of preparing the relevant tax returns • If transfer pricing documentation is not prepared then this may attract transfer pricing adjustments and penalties under the law • In addition. IRAS may not be as supportive of the transfer pricing positions of the taxpayer when it comes to voluntary adjustments or negotiations with other tax authorities to eliminate or mitigate double taxation (Mutual Agreement Procedure and Advanced Pricing Agreements) 21 .Transfer pricing documentation should be prepared prior to or at the time of undertaking the transactions.

interest etc. royalties. Action 13. The IRAS’ transfer pricing guidelines updated in January 2015 The IRAS issued guidelines on CbC reporting for Singapore are broadly in line with Action 13 Master file and local file MNEs on 10 October 2016 that generally are aligned with approach. transfer pricing policies and agreements with tax authorities in a single document available to all tax authorities where the MNC has operations. CbCR Broad information about the jurisdictional allocation of profits. 22 . employees and assets. Local file Detailed information about the local business including related party payments and receipts for products. services.BEPS Action 13 – TP documentation & CbC reporting Master file Broad information about the MNC’s business. revenues.

markets and Entity’s functions. if any operates Description of the management Determination of arm’s length price / Important drivers of profit. if required management reports Business information / relationships Testing the transaction against arm’s amongst all related parties Organisational chart showing number length outcomes of employees 23 . principal Entities business models and Contracts/agreements to substantiate substantiating the choice activities of each party strategies (past. including structure of the Singapore taxpayer. present and future) the terms of transactions Details on comparable companies Products and services. risks and assets Segmental financial information for competitors employed each of the transactions along with the Comparability analysis basis of derivation of segmental Industry profile in which the company Financial statements accounts Details of adjustments made.What is Transfer Pricing Documentation? • Transfer pricing documentation – records kept by taxpayers to show that efforts have been made to ensure that their related party transactions are concluded at arm’s length. Group information Singapore entity Transaction Transfer Pricing information information Analysis Worldwide organisational structure General information of Singapore Detailed information of all Choice of transfer pricing method with ownership linkages taxpayer transactions with related parties Choice of tested party with reasons Group’s business activities. margin a list of intangibles and the related including a description of the related parties that legally own them parties to whom the Singapore Use of range.

Instances where transfer pricing documentation is not required • Taxpayers are not expected to prepare TP documentation under the following situations: Transactions between local related party and income from transactions taxed at same rate 1 2 Loan transactions between local related parties. if lender is not in the business of borrowing and lending 3 Where a company applies the indicative margin for related party loans with certain conditions 4 Provision of prescribed routine services covered by the safe harbour cost +5% 5 Related party transactions covered by an agreement under APA 6 Value of other types of related party transactions does not exceed specified thresholds (see table below) 24 .

For example. Examples: • Service income • Service payment • Royalty income • Royalty expense • Rental income 1m per category of transactions • Rental expense • Guarantee income • Guarantee payment For the purpose of determining if the threshold is met. 25 .Instances where transfer pricing documentation is not required Category of related party transactions Threshold (S$) per financial year Purchase of goods from all related parties 15m Sale of goods from all related parties 15m Loans owed to all related parties 15m Loans owed by all related parties 15m All other categories of related party transactions. all service income received from related parties is to be aggregated. aggregation should be done for each category of related party transactions.

• Protect its own tax base. 26 . • Defend against other aggressive tax jurisdictions. implementation of Common Reporting Standards. Singapore is not tax haven. (Refer to Oxfam report) • Share information with other tax jurisdictions – information exchange and transparency -Implementation of CbC reporting.Transfer pricing – Why has Singapore become Vigilant? • Assure OECD and the world. General Anti-Avoidance provisions. new RPT reporting form. • Substance required to access tax incentives.

e.Common Audit Triggers for Transfer Pricing • Non-compliance with documentation requirements • Large quantum of related party transactions • Regional functions with no charge outs Possible sources of information for the IRAS • Huge variation in tax payable in ECI filing vs final tax payable in tax computation • Tax computations • Annual reports and financial statements • Start-up losses for more than two years • Company websites. Thomson Reuters. Bloomberg.g. such as royalties and services • Significant drops in profit after termination of tax incentive 27 . but expanding operations • Transfer pricing databases. • Fluctuating profit patterns inconsistent with profile • Exchange of information article in tax treaties • Transactions with related parties in tax havens • High-risk transactions. news articles • Lower profits or losses for extended period.

Transfer pricing controversy in Singapore – Trends and observations Examples of transfer pricing focus areas from the IRAS Type of transaction IRAS queries Sales and purchases Existence of transfer pricing policy Whether there are comparable transactions with third parties and the profit margins of these transactions Reasons for recurring losses Provision or recipient of services Mark-up applied to cost base Components of cost base Characterization of pass-through cost Basis of charge and methodology How the services benefit the Singapore taxpayer with evidence (if the Singapore taxpayer is the recipient of the services) Use of intangible property or sole Royalty rates and methodology distribution rights Nature of change Taxpayers with transfer pricing documentation and appropriate processes in place are always in a better position to respond to the IRAS’ queries. 28 .

benchmarking studies documentation years ago • Update with more information (e.g. HQ) • Start preparing TP documentation and consider putting in place formal TP Policy Prepared TP • Refresh analyses e. supply chain) separately or consider updating the documentation 29 . intercompany agreement) in line with new Requirements Prepared TP • Evaluate gaps in information based on new requirements documentation for latest • Prepare and maintain information that is not in the existing financial year recently documentation (e.g. functional analysis. value chain.What does this mean for taxpayers? Never prepared any formal • Assess your documentation needs (Global HQ/Regional HQ/Singapore TP documentation subsidiary) • Analyse gaps in TP documentation and polices • Identify sources of information (e.g. TP policy. value chain. supply chain) and prepare other pieces of documents (e.g.g.

The acquisition of the UK entity was funded by a combination of bank loans from third party banks in the UK and subject to parental guarantee provided to the banks by the Singapore parent company and subordinated loans direct from the parent to the UK Loan related entity. Loan trading of bunkers.Case Study – Transfer pricing planning strategy Facts of the case: 1. $100m Investment 5. 2. Purchase $200m Bunkers 30 . The issue was to price the related party transactions company in a way to reduce the overall effective tax rate. UK entity will then be involved in trading of bunkers guarantee $20m in the European market. ship owning. 4. etc. The group is growing and its management decided Singapore to expand to the UK. Support services Parental Loan 3. The group is based in Singapore and is involved in the business of ship management. Singapore entity is the parent UK company and UK entity is the subsidiary. Singapore entity then acquired the UK entity.

Shift income from UK to Singapore.Case Study – Transfer pricing planning strategy Benefits of transfer pricing: 1. Maximise return to shareholders. to reduce overall effective tax rate (tax rate differential is Loan currently 13%. $100. Introduce arm’s length guarantee fee to Singapore of 2. Maximise post-tax return on investment. Structure terms of intra-group loan of $20m from Loan Singapore entity to UK entity at an arm’s length $100m interest rate of 1%: annual reduction in overall tax Investment burden of $26. Fee for services provided annual reduction in overall tax burden of $195. Guarantee fee 1. Introduce fee for support services provided by Singapore on cost plus mark-up basis. assuming UK tax rate of 30% and Singapore tax rate of 17%). Support services Parental Loan Example of benefits: guarantee Arm’s length payments $20m 1. 2. company 3.000 ($20m*1%*13%). UK 3. Interest rate on loan 150 bps in respect of external funding of $100m: 3.g.5%*13%). Singapore 2.000 ($ 100m*1. amounting to Purchase e. Bunkers 31 .000 per year: annual reduction in overall $200m tax burden of $ 13000 ($100000*13%).

Closing remarks • Tax and Transfer Pricing scrutiny is on rise. deployed and implemented in accordance with the arm’s length principle. Being pro-active is paramount! 32 .A company that undertakes pro-active transfer pricing planning and diligently prepares and maintains adequate and timely transfer pricing documentation stands the best chance of satisfying IRAS that it has complied with the arm’s length principle. • It has been 11 years since the IRAS first issued its transfer pricing guidelines and 7 years since the arm’s length principle was legislated – there is a clear expectation that taxpayers should now be more informed about transfer pricing requirements. • Aligning transfer pricing model in line with business and commercial reality. • Precaution is better than cure! .

Annexures 33 .

4% Apple is being scrutinised by European officials.8% 28..7% 56.2% 2.5% 26. who accuse the company of using subsidiaries in Ireland to avoid paying taxes on revenue generated abroad.4% 3.1% 56.S. according to Bloomberg Intelligence analyst Matt Larson Amount in US $ millions 34 . its foreign tax rate is 1.4% 19.1% Foreign Effective Tax Rate 4. While apple generates about 60 percent of its sales outside the U.2% 1.3% 40.8% 22.5% 29.9% 1.9% 21.8% 2.9% 29.5% 32. Google Apple Starbucks 2012 2011 2010 2012 2011 2010 2012 2011 2010 Net revenues by Operating segment Earnings before income taxes (US) 5311 4963 4948 23733 13538 7590 1679 1523 1308 Earnings before income taxes (Rest of the world) 8075 7633 5848 39883 26838 15306 379 287 128 Total 13386 12596 10796 63616 40376 22896 2058 1810 1436 Taxes US Taxes 2513 1998 2115 13317 7681 4366 546 406 538 Foreign Taxes 358 248 167 713 602 161 77 37 38 Total 2871 2246 2282 14030 8283 4527 623 443 576 Effective Tax Rate US ETR (state + federal taxes) 47.8% 35.3% 42.8 percent.7% Global Effective Tax Rate 25.1% 20.7% 57.Unprecedented focus on the morality of multinationals tax affair….7% 41.3% 26.9% 29.3% 12.

profits are taxed at the corporate level and is a final tax. Oxfam named Singapore the fifth worst corporate tax haven for its lack of withholding taxes. Source: http://www. Cayman Islands. royalty. The Ministry of Finance (MOF) defended Singapore’s tax regime and said parts of the Oxfam report were inaccurate. Singapore does not impose withholding tax on dividends due to our one-tier corporate tax – dated December 12. its range of tax incentives.” the MOF said. The only other Asian city in the list is Hong Kong — at ninth place.todayonline. and evidence of substantial profit shifting. Netherlands and Switzerland in Oxfam’s ranking of 15 worst tax havens in the world.” was released on Monday (Dec 12) by United Kingdom-based charity organisation Oxfam. 2016 35 . which examined the extent to which countries encourage corporate tax avoidance.Singapore fifth worst tax haven in the world: Oxfam Months after committing to a global initiative to curb tax avoidance. Under this system. titled “Tax Battles: the dangerous global race to the bottom on corporate tax. Singapore has again come under the spotlight for its regime that allows companies to legally but artificially shift profits across borders to keep overall corporate taxes low.) is applicable for payments made to non-resident persons. services. “We note that the report cites the lack of withholding taxes as one of the characteristics of our regime. etc. Singapore came after Bermuda. This is inaccurate. interest. Withholding tax (for example. A new report.

Effective: Year of Assessment 2018 2. Scope: Companies will be required to complete a new form for reporting of Related Party Transactions (“RPT Form”) only if the value of RPT exceeds S$15 million -Test of whether value of RPT exceed S$15m: The value of RPT as disclosed in the audited accounts is the aggregate of: a. If the value of RPT exceeds S$15 million. Year-end balances of loans and non-trade amounts due to/ from all related parties 3. the company has to complete the RPT form and submit it together with Form C. 36 .New Related Party Transaction reporting (Form C) 1. All amounts of RPT as reported in the Income Statement but excluding compensation paid to key management personnel and dividends. RPT reporting requirement -state in Form C whether the value of RPT as disclosed in the audited accounts exceeds S$15 millions for the relevant Year of Assessment. and b.

50%) (https://www. 37 .sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Specific- topics/Transfer-Pricing/Other-Issues/) 4. SIBOR or LIBOR for floating rate loans. 1.g. the SGD equivalent of the loan amount is to be determined based on the prevailing exchange rate at the time the loan is obtained or provided.35 of TP Guidelines 4th edition: Not compulsory but alternative to performing detailed transfer pricing analysis on their eligible related party loans. If safe-harbour not adopted. Effective date: Related party loans obtained or provided from 1 January 2017 onwards 2.27 -13. Indicative margin at the start of each year published on the IRAS: Loans between 1 January 2017 to 31 December 2017 indicative rate: +250 bps (2.Interest Rate Safe-Harbour Para 13. How it Works Apply the indicative margin to an appropriate base reference rate as appropriate. 3. Singapore Govt Securities yield for fixed rate loans. Both the Singapore-denominated and foreign currency denominated eligible related party loans. Foreign currency denominated related party loan. will need to support margin with TP analysis and documentation. Eligible related party loans: Quantum not exceeding S$15 million (including committed but not utilized) at the time the loan is obtained or e.iras.

Some jurisdictions would be implementing CbCR for FY beginning on or after 1 Jan 2016. CbC Reports submitted to IRAS will be provided to tax authorities of countries with which Singapore has signed bilateral agreements for automatic exchange of CbCR information.Country-by-Country Reporting Country-by-Country Reporting (CbCR) is a form of reporting by multinational enterprises (MNEs) initiated by the Organisation for Economic Co-operation and Development (OECD) in the Base Erosion and Profit Shifting (BEPS) Action 13 Report. A CbC Report of the MNE group will include information on the group’s global allocation of the income and taxes paid in different countries and other financial data. affected Singapore-headquartered MNEs may file a CbC Report for FY beginning on or after 1 Jan 2016 to IRAS on a voluntary basis. 38 . CbC Reports may be used by Singapore and other tax authorities in evaluating transfer pricing risks and other BEPS related risks. To address the transition issue arising from this.e. i. In keeping with Singapore’s commitment to implement certain measures under the BEPS Project. Singapore-headquartered MNEs meeting certain conditions are required to prepare and file CbC Reports to IRAS for financial years (FYs) beginning on or after 1 Jan 2017. Voluntary Filing.

Model template for the Country-by-Country Report 39 .BEPS Action 13 New Chapter V: CbC 3 Financial Data by Country Annex III to Chapter V Transfer pricing documentation – Country-by-Country Report A.

BEPS Action 13 New Chapter V: CbC 3 Financial Data by Country 40 .

and 3.Country-by-Country Reporting – Who and When Who needs to file the CbC Report The ultimate parent entity of the Singapore MNE group will be required to file a CbC Report for all entities in the group. When CbC Report should be submitted Within 12 months from the end of the ultimate parent entity's financial year. The ultimate parent entity of the MNE group is tax resident in Singapore.125 million. Ultimate parent entity's FY ends in March: The first set of CbC Report will relate to the financial period 1 Apr 2017 to 31 Mar 2018 (FY 2017). Example: Ultimate parent entity's FY ends in December: The first set of CbC Report will relate to the financial period 1 Jan 2017 to 31 Dec 2017 (FY 2017). 41 . The MNE group is required to submit the CbC Report if it meets all of the following conditions: 1. This should be submitted to IRAS no later than 31 Dec 2018. 2. This should be submitted to IRAS no later than 31 Mar 2019. Consolidated group revenue for the MNE group in the preceding financial year is at least S$1.The MNE group has subsidiaries or operations in at least one foreign country.

The recipient should not further circulate or use this material in any manner without prior consent of the +65 63292718 +65 84363857 Disclaimer: This is a general presentation for information and educational purposes only and should not be construed as a professional advice. 42 . Thank You! Chintan Manager Complete Corporate Services Pte Ltd chintanshah@complete-corp. All rights reserved.