Country-by-Country Reporting (CbCR) for Singapore-headquartered multinational enterprises (MNEs)

In line with OECD’s BEPS Action Plan 13, Singapore MNEs are required to file CbCR with the Singapore tax authority to be shared with relevant tax administrations for use in high level Transfer Pricing and BEPS risk assessments. Here is what you need to know.

Background

As part of the Base Erosion and Profit Shifting initiative (BEPS) and the Action Plans 13 and 15 as issued by the Organization for Economic Co-operation and Development (OECD) in 2015, a three-tiered documentation structure has been prescribed for qualifying companies. These three together represent a standardized approach to Transfer Pricing documentation to provide tax administrations with relevant and reliable information to perform an efficient and robust transfer pricing risk assessment analysis

One compliance requirement is the CbCR, which is to be maintained by the MNEs meeting the qualifying thresholds.

A CbCR filing requires aggregate tax jurisdiction-wide information relating to the global income per jurisdiction, the taxes paid per jurisdiction, and certain other financial indicators of each tax jurisdiction in which the reporting MNE Group operates.

Applicability

As per the current Guidelines issued by the Inland Revenue Authority of Singapore (IRAS), CbCR is applicable for Singapore headquartered MNE Groups from the Financial Year 2017 onwards.

Principally, CbCR is required for an MNE Group in relation to a financial year where:

  1. The Group is Singapore headquartered;
  2. The consolidated Group revenue in the preceding financial year is at least S$1,125 million; and
  3. The MNE group has subsidiaries or operations in at least one foreign jurisdiction

Filing timeline

If a Singapore MNE Group is required to file a CbCR for a financial year, then the ultimate parent (or Reporting) entity will be required to submit the same within 12 months from the end of the financial year.

The submission must be done electronically in accordance with the specified format which is quite detailed and comprehensive.

Penalties for Non-Compliance

In the case of any failure to file the CbCR by the due date, there are certain prescribed penalties which the Singapore tax authority may levy on the MNE Group.

How Mazars can help

The preparation and delivery of the CbCR not only requires extensive work compiling the relevant accounting data, but a deep understanding of each jurisdiction’s CbCR requirements. At Mazars, we have a team of dedicated Transfer Pricing experts who can help you keep your business tax compliant. We can analyse the applicability of CbCR filing requirement for the relevant financial year and/or provide on-going assistance in preparing the detailed filing/submission requirements as to ensure full compliance.

For further discussions, please contact Sahil Seth or Gene Kwee.