Advisory

Transfer Pricing Documentation and Compliance It is mandatory for taxpayers to prepare and maintain contemporaneous Transfer Pricing Documentation (TPD) to show that their company’s related party transactions are in accordance with the arm’s length principle【1*】, unless exempted. “Contemporaneous” means that in preparing the TPD, the information and data relied on by the taxpayer to determine transfer pricing should exist prior to or at the time of undertaking the transactions with related parties. It is vital for the taxpayers in Singapore to ensure that the TPD is ready before the filing due date of tax return which is 30 November. IRAS […]

Transfer Pricing Benchmarking and Analysis This analysis involves comparing similar uncontrolled transactions (i.e. an independent third party) to which the controlled transactions (i.e. the tested transaction) can be benchmarked against. The comparability analysis and benchmarking analysis will form the basis to arrive at a transfer pricing that complies with the arm’s length principle. It thus plays a significant role in substantiating the transfer pricing positions and defend against any challenges from tax authorities. The Inland Revenue Authority of Singapore (IRAS) recommends that Singapore taxpayers adopt the following three-step approach to apply the arm’s length principle: FOZL has access to a […]

Introduction to Transfer Pricing Transfer pricing (TP) is an accounting practice used to determine the prices of inter-company pricing transactions or arrangements between related parties. These can include transfers of intellectual property, tangible goods, services, loans or other financing transactions. Companies should keep in mind that the definition of “related parties” may vary between jurisdictions depending on the specific regulations and contexts. Under the Singapore Income Tax Act (ITA) section 2(1), “related party” is defined as when either party directly or indirectly controls the other, or they are under the common control of another party, whether directly or indirectly. The […]