Singapore legislation
Regulation 4B
Regulation 4B
Computation of consolidated group revenue of MNE group formed by merger involving entities not belonging to any group, etc.
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 2 or more entities that are each not a member of any group become entities of an MNE group; or
pursuant to which one or more entities that are each not a member of any group and the entities of one or more groups (each called a constituent group) become entities of a single MNE group.
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.
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 of the merged group before the merger FY; and
the merged group’s consolidated group revenue for a pre-merger FY is computed by —
in the case of paragraph (1)(a) — aggregating the revenue of all the entities, as reflected in each entity’s financial statements for the pre-merger FY, whether or not those entities existed for the entire period of the pre-merger FY; or
in the case of paragraph (1)(b) — aggregating the revenue of the firstmentioned entity or each of the firstmentioned entities in paragraph (1)(b) (as reflected in its financial statements for the pre-merger FY) and the consolidated group revenue of every constituent group (determined by reference to the consolidated financial statements of its ultimate parent entity) for the pre-merger FY, whether or not that entity or 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 —
in the case of paragraph (1)(a) — aggregating the following:
the revenue of all the entities, as reflected in each entity’s financial statements for its financial year that ends at any time in the merger FY;
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; or
in the case of paragraph (1)(b) — aggregating the following:
the revenue of the firstmentioned entity or each of the firstmentioned entities, as reflected in its financial statements for its financial year that ends at any time in the merger FY;
the consolidated group revenue of every constituent group (determined by reference to the consolidated financial statements of its ultimate parent entity) for its financial year that ends at any time in the merger FY;
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.
Subregulation 6
If the financial year of any entity or 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 entity’s revenue or the constituent group’s consolidated group revenue (as the case may be) for each pre-merger FY to be included for the purposes of applying section 8(1) to the merged group is the entity’s revenue or constituent group’s consolidated group revenue for its financial year that ends at any time in the pre-merger FY.ExampleAn MNE group uses the calendar year as its financial year. On 1 January 2025, an entity that is part of the MNE group acquires ownership interests in another entity that is not part of any group and that uses 30 September as the end of its financial year. The MNE group continues to use the calendar year as its financial year after the acquisition.The pre-merger FYs are 1 January 2024 to 31 December 2024, 1 January 2023 to 31 December 2023, 1 January 2022 to 31 December 2022 and 1 January 2021 to 31 December 2021. The merger FY is the period beginning on 1 January 2025 and ending on 31 December 2025.In applying section 8(1) to determine whether the Act applies to the MNE group in respect of its financial year beginning 1 January 2025, the revenue of the acquired entity for each of the financial years ending 30 September 2024, 30 September 2023, 30 September 2022, and 30 September 2021 is added to the consolidated group revenue of the MNE group for the 4 preceding financial years ending 31 December 2024, 31 December 2023, 31 December 2022 and 31 December 2021, respectively.The acquired entity’s revenue for the period between 1 October 2024 and 31 December 2024 (both dates inclusive) (which would have been included in the financial statements of that entity in the following year if it had not been acquired) is not included in the computation of the MNE group’s consolidated group revenue for the calendar years 2024 and 2025.
Subregulation 7
In this regulation, “merger” means an arrangement mentioned in paragraph (1)(a) or (b).