IRAS: Country-by-Country Reporting (CbCR) Filing Requirements
Singapore-headquartered multinational enterprise (MNE) groups meeting specific requirements are mandated to submit Country-by-Country Reports (CbCR) to the Inland Revenue Authority of Singapore (IRAS) for financial years beginning on or after 1 Jan 2017.
What is Country-by-Country Reporting (CbCR)?
CbCR is an initiative by the Organisation for Economic Co-operation and Development (OECD) as part of the Base Erosion and Profit Shifting (BEPS) Project. It aims to enhance transparency in global business operations by providing tax authorities with detailed information on an MNE’s income, taxes paid, and business activities in different jurisdictions.
Key Requirements:
- Consolidated Group Revenue: At least S$1,125 million in the preceding financial year.
- Global Operations: Must have subsidiaries or operations in at least one foreign jurisdiction.
- Ultimate Parent Entity: The Singapore entity must be the ultimate parent of the MNE group and tax resident in Singapore.
CbCR Filing Deadline
CbCR reports must be filed with IRAS within 12 months from the end of the ultimate parent entity’s financial year. For example, for financial years starting on 1 Jan 2021, the report must be filed by 31 Dec 2021.
Important Notification Changes for FYs Beginning on or After 1 Jan 2022
As of FY 2022, Singapore MNE groups are required to notify IRAS of their obligation to file a CbC Report within 3 months from the end of the financial year via FormSG. This replaces the prior system where IRAS issued annual notification letters.
For entities obligated to file, the notification must include:
- Name and Tax Reference Number of the ultimate parent entity.
- Financial reporting period.
- Contact person’s details.
How to Submit CbC Reports
CbCR reports should be submitted in the CbCR XML format, following the OECD’s guidelines. The report should be zipped, password-protected, and sent via email to [email protected]. A strong password is required, following IRAS’s specified guidelines for security.
Why Is CbCR Important?
CbC reports help tax authorities evaluate transfer pricing risks and other BEPS-related risks across jurisdictions. These reports provide valuable insight into how income is distributed within MNEs, ensuring compliance with local tax regulations and international standards.
Penalties for Non-Compliance
Failing to comply with CbCR requirements may lead to:
- Late filing penalties by IRAS.
- Fines of up to SGD 5,000 per offence.
- Disqualification of directors for repeated non-compliance.
- Striking off by ACRA for serious non-compliance.
