Singapore: FAQs on transfer pricing implications of COVID-19

Singapore: FAQs on transfer pricing implications

The Inland Revenue Authority of Singapore (IRAS) published a set of “frequently asked questions” (FAQs) to address transfer pricing considerations of those taxpayers whose businesses have been affected by the coronavirus (COVID-19) pandemic.


The first part of the IRAS guidance addresses options that may be available to taxpayers in relation to the preparation of transfer pricing documentation if their business operations have been severely affected by the COVID-19 pandemic.

Other parts of the guidance relate to the impact of the COVID-19 pandemic situation on advance pricing arrangement (APA) applications—whether new or currently under review—as well as on existing APAs arising as a result of COVID-19.

Given that businesses may have been affected differently by the COVID-19 pandemic situation, IRAS acknowledged that there could be significant and varying implications for the transfer pricing positions of different taxpayers. Most notably, IRAS indicated that taxpayers may apply multi-year testing (generally over three years, that is, by using a three-year weighted average margin over FY 2018 to 2020) rather than annual testing, for the Year of Assessment (YA) 2021. This is a one-off concession that may help smooth out certain volatile results from the COVID-19 pandemic. In general, multi-year testing is only allowed under exceptional circumstances and after consultation with IRAS.

Read an October 2020 report [PDF 208 KB] prepared by the KPMG member firm in Singapore

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