On 3 November 2016, the Inland Revenue Authority of Singapore (IRAS) has introduced the requirement for certain corporate taxpayers to file a Form for Reporting Related Party Transactions (RPT). The RPT data will help the IRAS in:
- assessing companies’ transfer pricing risks
- selecting appropriate cases for transfer pricing consultation, and
- improving the enforcement of the arm’s length requirement.
This requirement for filing Form for reporting RPT will take effect from the Year of Assessment (YA) 2018.
Taxpayers must report certain details of RPT through the Form for Reporting Related Party Transactions if the value of RPT in the audited accounts for the financial year exceeds $15 million.
The IRAS has also introduced an indicative margin which taxpayers can apply on each related party loan not exceeding $15 millon during the periods from:
- 1 January to 31 December 2017, and
- 1 January to 31 December 2018.
The value of RPT as disclosed in the audited accounts is the sum of:
- all RPT items in the Income Statement but excluding compensation paid to key management personnel and dividends, and
- the year-end balances of loans and non-trade amounts due to/from all related parties.
The values of the following categories of RPTs are to be reported in the form:
- sales and purchases of goods
- services income and expense
- royalty and license fee income and expense
- interest income and expense
- other income and expense, and
- year-end balances of loans and non-trade amounts.
A company with cross-border related-party sales or purchases of goods and services is required to list the top five foreign-related parties that it transacts with (by value of sales or purchases respectively) and provide their entity details including:
- entity names
- countries
- relationship, and
- amounts transacted.
The deadline for submitting Form for reporting RPT should be submitted together with the submission of Form C.
For more information, refer to the Reporting of RPT available on the IRAS website
Source: IRAS, 7 June 2018