SINGAPORE: Inland Revenue Authority of Singapore (IRAS) released details of a new form that certain companies will be required to file from the 2018 assessment year to report their related-party transactions.
The form must be completed and filed together with the income tax return (Form C) if the value of related-party transactions disclosed in the audited accounts for the applicable financial year exceeds SGD15m (USD10.8m). The IRAS noted that the value of related-party transactions as disclosed in the audited accounts is the aggregate of all amounts of related-party transactions as reported in the income statement but excluding compensation paid to key management personnel and dividends; and year-end balances of loans and non-trade amounts due to/from all related parties.
The values of the following categories of related-party transactions 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 has 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 IRAS said that the form will provide it with the relevant information to better assess companies’ transfer pricing risks and to improve on the enforcement of the arm’s length requirement.