(i) Filing Returns:
In Singapore, the year of assessment is usually the calendar year, although a company’s income may be assessed based on its financial year. Tax is calculated on a preceding-year basis, which means that the tax liability for a year of assessment is determined based on income accrued, derived, or received in Singapore in the preceding calendar or financial year.
Companies are required to submit an Estimated Chargeable Income (ECI) statement within three months from the end of their financial year. Corporate tax returns on Form C, along with audited or unaudited accounts and tax computation, must be filed by 30 November of the following year. Tax payment is due within 30 days of the issuance of the assessment, even if an objection is made. Alternatively, taxpayers can arrange to pay taxes in instalments with the IRAS, provided the arrangements are made at the beginning of the year.
The IRAS engages in training on transfer pricing with other tax authorities and regularly shares information with other ASEAN jurisdictions. However, no specific announcements have been made regarding industries of interest to the IRAS.
(ii) Transfer Pricing Information Return:
Prior to 2004, there was a requirement for taxpayers to make a declaration when related party transactions exceeded 25% of their annual revenue or total purchases. This declaration had to affirm that such transactions were conducted at arm’s length. However, this requirement has been removed from corporate tax returns for the years 2005 onwards.
(iii) Assessment:
Tax assessment is based on the information provided in the tax return, and there is no requirement for advance payments of tax.
(iv) Practical Issues and Statutory Guidance on Transfer Pricing Regime:
In May 2013, Singapore announced a consultation on extending the exchange of information assistance to all double tax treaty partners without amending the treaties themselves. The exchange of information standards was offered to treaty partners that made reciprocal arrangements for information exchange. Singapore signed the Convention on Mutual Administrative Assistance on Tax Matters on 29 May 2013 and deposited its instrument of ratification on 20 January 2016.
Singapore has shown its commitment to the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project by joining the inclusive framework for its global implementation. As a BEPS Associate, Singapore participates in the OECD’s Committee on Fiscal Affairs and has equal rights and obligations as OECD and G20 countries involved in BEPS work. Singapore supports the principle that profits should be taxed where the real economic activities generating the profits are performed and where value is created. It also commits to implementing the four minimum BEPS standards, including countering harmful tax practices, preventing treaty abuse, transfer pricing documentation, and enhancing dispute resolution.
In January 2017, the IRAS issued the fourth edition of the e-tax guide on transfer pricing guidelines, emphasizing the principle that profits should be taxed where economic activities and value creation occur. The guide also provided more detailed guidance on the analysis of functions, assets, and risks.
Singapore has an extensive tax treaty network with 84 tax treaties in place and has an established Mutual Agreement Procedure (MAP) program. The OECD has conducted peer review reports on Singapore’s implementation of the BEPS minimum standard under Action 14, which focuses on improving tax dispute resolution mechanisms. Singapore has been found to meet most of the elements of the Action 14 minimum standard, and its efforts to address any identified shortcomings will be monitored in the next stage of the peer review process.
(v) Ongoing Developments under OECD/G20 BEPS:
Singapore’s commitment to the BEPS Project includes participating in the inclusive framework and supporting the key principle of taxing profits where economic activities and value creation occur. It is willing to cooperate with other jurisdictions as a BE
Singapore is also dedicated to implementing the four minimum BEPS standards, including countering harmful tax practices, preventing treaty abuse, transfer pricing documentation, and enhancing dispute resolution.