Singapore legislation
Regulation 4A
Regulation 4A
Computation of consolidated group revenue of MNE group formed by merger of 2 or more groups
Subregulation 1
This regulation applies for the purposes of determining whether, in accordance with section 8, the Act applies for a financial year to an MNE group (called the merged group) that is formed by an arrangement pursuant to which all or substantially all of the entities of each of 2 or more groups (each called a constituent group) become entities of a single MNE group (called the merger).
Subregulation 2
In this regulation —
Definition
“first financial year”, in relation to a merged group, means the financial year of the merged group in which the effective date of the merger falls;
Definition
“merger FY” means the period —
beginning on the first day after the pre-merger FY that is the first period before the first financial year of the merged group; and
ending on the last day of the first financial year of the merged group;
Definition
“pre-merger FY” means the first, second, third or fourth period before the first financial year of the merged group, each being a period of 12 months that ends in the same calendar month as the calendar month in which the first financial year of the merged group ends.ExampleGroup M is formed by a merger of the entities of Group A and the entities of Group B, and the effective date of the merger is 1 July 2024. The financial year of Group M in which the effective date of the merger falls i.e., the first financial year of Group M, is 1 July 2024 to 31 December 2024.The pre-merger FYs are 1 January 2023 to 31 December 2023, 1 January 2022 to 31 December 2022, 1 January 2021 to 31 December 2021 and 1 January 2020 to 31 December 2020.The merger FY is the period beginning on 1 January 2024 and ending on 31 December 2024.
Subregulation 3
The merger FY is treated as a financial year of the merged group.
Subregulation 4
In determining whether the merged group’s consolidated group revenue is equal to or exceeds the threshold in section 8(2) for any financial year before the merger FY —
each pre-merger FY is treated as a financial year before the merger FY; and
the merged group’s consolidated group revenue for a pre-merger FY is computed by aggregating the consolidated group revenue of every constituent group (determined by reference to the consolidated financial statements of the constituent group’s ultimate parent entity) for the pre-merger FY, whether or not the constituent group existed for the entire period of the pre-merger FY.
Subregulation 5
In determining whether the merged group’s consolidated group revenue is equal to or exceeds the threshold in section 8(2) for the merger FY, the merged group’s consolidated group revenue for the merger FY is computed by aggregating —
the consolidated group revenue of every constituent group (determined by reference to the consolidated financial statements of the constituent group’s ultimate parent entity) for its financial year that ends at any time in the merger FY; and
the consolidated group revenue of the merged group (determined by reference to the consolidated financial statements of its ultimate parent entity) for its first financial year.ExampleGroup A, Group B and Group C merged to form a single MNE group (called Group M) on 1 July 2024. Each of Group A, Group B and Group C (prior to the merger) and the merged group uses the calendar year as their respective financial years. The merger FY is from 1 January 2024 to 31 December 2024 (both dates inclusive).The financial year concerned for the purposes of section 8(1) in respect of Group M is the financial year beginning on 1 January 2025.For the financial years 2021, 2022, 2023 and 2024, the respective sums of the consolidated group revenue of Group A, Group B and Group C are as follows:YearSums of consolidated group revenue (EUR) of Group A, Group B and Group C2021300 million2022550 million2023770 million2024 — from 1 January 2024 to 30 June 2024 (both dates inclusive)355 millionIn the merger FY, the consolidated group revenue of Group M for the period of 1 July 2024 to 31 December 2024 (both dates inclusive) is EUR 400 million.In applying section 8(1) to determine whether the Act applies to Group M in respect of the financial year beginning on 1 January 2025, Group M’s consolidated group revenue for the merger FY is EUR 755 million, being the sum of EUR 355 million and EUR 400 million. As the consolidated group revenue of Group M also exceeded EUR 750 million in the financial year 2023 (as determined by the sums of the consolidated group revenue of Group A, Group B and Group C), the Act applies to Group M for financial year 2025 under section 8(1).
Subregulation 6
If the financial year of any constituent group ends in a calendar month that is different from the calendar month in which the first financial year of the merged group ends, the constituent group’s consolidated group revenue for each pre-merger FY to be included for the purposes of applying section 8(1) to the merged group is the constituent group’s consolidated group revenue for its financial year that ends at any time in the pre-merger FY.