The Country-by-Country Reporting (CbCR) regulation is a crucial component of international tax compliance for multinational enterprises (MNEs). In Singapore, the Inland Revenue Authority of Singapore (IRAS) has implemented specific guidelines aligned with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13. This article aims to provide Chief Financial Officers (CFOs) and other financial executives with a comprehensive understanding of the CbCR requirements in Singapore, including applicability, filing procedures, and penalties for non-compliance.

Applicability of CbCR in Singapore

Criteria for Reporting:

• MNE groups with consolidated group revenue of at least SGD 1,125 million (equivalent to approximately USD 800 million) in the preceding fiscal year are required to submit a CbC report.
• The reporting entity is typically the ultimate parent entity of the MNE group that is a tax resident in Singapore.

Relevant Legislation:

• The primary legislative framework for CbCR in Singapore is outlined in the Income Tax (International Tax Compliance Agreements) (Country-by-Country Reporting) Regulations.
• Further details can be found in the Income Tax Act (Cap. 134).

Reporting Requirements

Information to be Reported:

• The CbC report must include aggregate information related to the global allocation of income, taxes paid, and certain indicators of the location of economic activity among tax jurisdictions in which the MNE group operates.
• It also requires a list of all the constituent entities for which financial information is reported, including the jurisdiction of tax residence of each constituent entity.

Form and Submission:

• MNEs must complete and submit the CbC report using the Form SG-CbCR1.
• The report should be filed electronically via the IRAS e-Submission portal.
  • More information on e-filing can be found on the IRAS CbCR page.

Filing Deadlines

• The CbC report must be submitted within 12 months after the end of the reporting fiscal year. For instance, if the fiscal year ends on 31 December 2023, the report must be submitted by 31 December 2024.

Penalties for Non-Compliance

Penalties:

• Failure to comply with the CbCR requirements can result in significant penalties. An MNE group that fails to submit the CbC report by the deadline may be liable to a fine not exceeding SGD 10,000.
• Continued failure to comply may lead to further penalties, including imprisonment for up to two years in cases of severe non-compliance.

Defences:

• In certain cases, if the entity can demonstrate reasonable cause for the non-compliance, the IRAS may consider mitigating the penalties.

Confidentiality and Use of Information

Data Protection:

• The information contained in the CbC report is confidential and will only be exchanged with tax authorities of jurisdictions with which Singapore has a qualifying competent authority agreement.
• The data is used to assess high-level transfer pricing risks and other BEPS-related risks.