Transfer Pricing Documentation and Compliance

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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 may require taxpayers to submit their TPD within 30 days of request. In addition, the TPD is to be retained for a period of at least 5 years from the end of the basis period in which the transaction took place.

As stipulated in the Singapore Income Tax Act, the taxpayers must prepare Master File and Local File at the group level and entity level respectively. These documents are prepared in accordance with the standards published by the Organisation for Economic Cooperation and Development (OECD).

At FOZL, we are able to assist you in preparing the relevant TPD and ensuring timely submission. Furthermore, we can also provide assistance in respect of transfer pricing planning and tax structuring that help to mitigate the risk of non-compliance.

Our services include:

• Preparation of all aspects of transfer pricing compliance documentation – Master File and Local Files
• Analysis of the related party transactions and calculate the appropriate benchmark profit allocation or markup.
• Country by Country Reporting (CbCr) (Only required when the group revenue is over SGD1.125 billion and the Ultimate Parent Entity (UPE) is a Singapore registered company).

 

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【1*】Section 34F of the Income Tax Act, refer to URL link: https://sso.agc.gov.sg/Act/ITA1947?ProvIds=P17-#pr34F-