Singapore: New release of transfer pricing guidelines

The sixth edition of the e-tax guide on transfer pricing guidelines

The sixth edition of the e-tax guide on transfer pricing guidelines

The Inland Revenue Authority of Singapore (IRAS) released its sixth edition of the e-tax guide on transfer pricing guidelines.

Key changes include:

  • Transfer pricing audits and methods
  • Services transactions
  • Advance pricing arrangement (APA) / mutual agreement procedure (MAP)
  • Application of surcharge
  • Expanded guidance for financial transactions
  • Cost contribution arrangements (CCA)

KPMG observation

The guidelines contain some substantive changes and introduction of new concepts that are affected by the IRAS’ transfer pricing audit experience, its interactions with other tax authorities, as well as recent international developments and Singapore’s involvement therein.

Given the IRAS’ emphasis on timeliness, taxpayers must critically assess whether they not only have the resources but also the process in place to actively manage their transfer pricing matters on a day-to-day basis. A key focus area would be the capability to extract, process and interpret real-time financial information to evaluate the need for transfer pricing adjustments.

As such, taxpayers need to consider whether they need to transform their tax and finance function and, when appropriate, deploy the use of technology to derive greater insights and value. From a technical perspective, taxpayers need to review their intercompany funding arrangements considering the revised guidelines, especially when interest-free loans have been extended to foreign affiliates.

Read an August 2021 report [PDF 400 KB] prepared by the KPMG member firm in Singapore

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.