The Government of Singapore published, on 5 February 2018, the "Income Tax (International Tax Compliance Agreements) (Country-by-Country Reporting) Regulations 2018" (the CbCR Regulations) under the Income Tax Act (ITA) in the Singapore Government Gazette.

CbCR application and obligations

The CbCR Regulations are applicable for any accounting period beginning on or after 1 January 2017, and stipulate that Singapore-resident ultimate parent entities (UPEs) of the following two types of Multinational Enterprise (MNE) groups are required to submit a Country-by-Country (CbC) report to the Comptroller (or an authorized person):

• Type A Group: An MNE group with consolidated revenues of at least S$1.125b (US$850m) and has two or more entities that are tax residents in different countries
• Type B Group: An MNE group with consolidated revenues of at least S$1.125b and has a single entity that is tax resident in one country, but is also subject to income tax for its business carried out through a permanent establishment in another country

The CbC report must be submitted no later than 12 months after the end of the accounting period, or a later time as the Comptroller may permit.

In addition, the UPE must keep and retain all records that it uses to prepare a CbC report for a period of five years after the end of the accounting period.

The Inland Revenue Authority of Singapore (IRAS) accepts voluntary filing for financial year (FY) 2016. Singapore MNE groups that are subject to CbCR requirements in foreign jurisdictions in FY 2016 can voluntarily file their CbC reports in Singapore even though the CbCR requirements in Singapore are only effective for the FY beginning on or after 1 January 2017.

Noncompliant taxpayers may be subject to the following penalties:

• A S$1,000 (US$760) penalty is imposed on the failure to file the CbC report by the due date or to retain all records used to prepare a CbC report for a period of five years. If the penalty is not paid, the responsible person may be imprisoned for up to six months. An additional penalty of up to S$50 (US$38) per day may also be imposed for every day during which the failure continues after conviction.
• A penalty of up to S$10,000 (US$7,600) applies to the filing of false or misleading CbCR information. The responsible person may also be imprisoned for up to two years.

Recent update on the exchange of CbC reports

On 1 February 2018, the "Income Tax (International Tax Compliance Agreements) (Multilateral Competent Authority Agreement on the Exchange of Country-By-Country Reports) Order 2018" (Order 2018) under the ITA was published in the Singapore Government Gazette. The First and Second Schedules of the Order 2018 list the 42 countries with which the IRAS will exchange CbC reports.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Solutions LLP, International Tax Services, Singapore

• Luis Coronado
  luis.coronado@sg.ey.com
• Stephen Lam
  stephen.lam@sg.ey.com
• Jonathan Belec
  jonathan.belec@sg.ey.com
• Stephen Bruce
  stephen.bruce@sg.ey.com

Ernst & Young LLP, Singapore Tax Desk, New York

• Su Ling Agnew
  suling.agnew@ey.com

Ernst & Young LLP, Asia Pacific Business Group, New York

• Chris Finnerty
  chris.finnerty@ey.com
• Kaz Parsch
  kazuyo.parsch@ey.com
• Bee-Khun Yap
  bee-khun.yap@ey.com

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ATTACHMENT

PDF version of this Tax Alert