New form for reporting related party transactions

In an effort to further ensure that taxpayers comply with transfer pricing documentation and the arm's length pricing requirements in relation to their related party transactions (“RPT”), Inland Revenue Authority of Singapore (“IRAS”) has just introduced a new Form for Reporting RPT (“RPT Form”) for companies to take effect from Year of Assessment 2018, i.e. financial year 2017, but only if the value of all RPT exceeds S$15 million. The purpose of introducing this new Form is to enable IRAS to better assess companies’ transfer pricing risks and improve on their enforcement of the arm's length pricing requirement.

The reporting requirement threshold

A company is required to state in its tax return Form C whether the aggregate of all amounts of its RPT disclosed in audited financial statements for the financial year in question exceeded S$15 million. If so, the completion of RPT Form is compulsory and the completed form must be lodged together with the company’s tax return Form C for that year of assessment.

For the S$15 million threshold determination, it is the aggregate of the following value of RPT as disclosed in the company’s audited financial statements:

  • All amounts of RPT 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.

What must be disclosed

The RPT Form calls for the line by line reporting of each type or category of RPT as noted below:


  • Sales and purchases of goods
  • Services income and expense
  • Royalty and licence fee income and expense
  • Interest income and expense
  • Other income and expense
  • Year-end balances of loans and non-trade amounts


With cross-border related party sales or purchases of goods and services, the reporting company has to list the top 5 foreign related parties that it transacts with and provide the name of the related party, the country of its incorporation, the aggregate amount of RPT with that entity and the relationship (e.g. ultimate holding company, intermediate or immediate holding company, subsidiary, associated company or other categories such as a joint venture or another company within the same group). Such detailed information hitherto is not required to be disclosed or mentioned in the Notes to the financial statements on RPT but is now requested in the new Form.

As for loans and non-trade amounts, only the opening and closing balances due to and/or due from related parties are required to be disclosed. It is unclear at this point in time whether there will be a requirement to separately disclose RPT carried out during the course of the financial year if the balances owed to or due from related parties at the beginning and end of that financial year are zero.

There is also a requirement to state the identity of the ultimate holding company and its country of incorporation.

What it means for companies

The new reporting requirement is part of a continuous effort by IRAS in transfer pricing enforcement and administration. On 10 October 2016, IRAS issued an e-Tax Guide on Country-by-Country (“CbC”) reporting for Singapore multinational enterprises (“MNEs”) from financial year 2017 onwards. This is targeted at the larger companies, and the CbC reporting will form part of the transfer pricing documentation to be maintained by MNEs.  Now, IRAS is looking into greater transparency from smaller companies. The new RPT Form requires companies to disclose detailed information on the type and value of RPT with both domestic and overseas related entities and in respect of the latter, further details such as the country of incorporation of the foreign related entities and their exact relationship to the reporting company.

Penalty provisions

Emphasis is placed on the diligent completion of the RPT Form, which forms a part of the tax return Form C. A penalty may be imposed for the non-filing of the Form if required to do so or for the provision of incorrect information. There is a Declaration section at the end of the RPT Form that has to be signed off by the company director, principal officer or a person authorised by the company, declaring that the information given in the Form is true and complete.

How we may assist

Ahead of the tax filing for Year of Assessment 2018, we recommend that companies should start reviewing their related party transactions to ensure that the transfer pricing policies are in place and proper analysis for offshore RPT is maintained for easy extraction when the need arises.  Companies should be aware that under the Transfer Pricing Guidelines, issued by IRAS in January 2016, IRAS requires taxpayers to prepare and keep contemporaneous transfer pricing documentation to support the pricing of their RPT where the value exceeds the thresholds set. Do contact us if our assistance in these areas is required.

Details of our earlier alerts can be found in the links below:


IRAS Releases Third Edition of Transfer Pricing Guidelines
IRAS Releases Second Edition of Transfer Pricing Guidelines

You may contact one of our tax specialists below:

Elis Tan, Director, Transfer Pricing
T +65 6594 7819

Cindy Lim, International Tax Partner
T +65 6594 7852

Koh Puay Hoon, International Tax Partner
T +65 6594 7820

William Chua, International Tax Partner
T +65 6594 7860