Transfer Pricing

Our Specialists

Elis Tan Director, Transfer Pricing
 
 
Cindy Lim Partner & Head, International Tax Advisory
 
 
Koh Puay Hoon Partner & Head, Tax Compliance
 
+65 6594 7820
phkoh@RSMSingapore.sg
 
William Chua Partner
 
 

The Inland Revenue Authority of Singapore has issued Transfer Pricing Guidelines on 6 January 2015 which effectively makes it mandatory for businesses to prepare contemporaneous Transfer Pricing documentation to substantiate that their related party transactions are at arm's length, except in the following situations:

  • Where the taxpayer transacts with a related party in Singapore and such local transactions (excluding related party loans) are subject to the same Singapore tax rates for both parties.
  • Where a related domestic loan is provided between the taxpayer and a related party in Singapore and the lender is not in the business of borrowing and lending.
  • Where the taxpayer applies the 5% cost mark-up for certain routine services in relation to the related party transactions.
  • Where the related party transactions are covered under an Advanced Pricing Agreement ("APA"). However, an annual compliance report is still required.
  • Where the value or amount of the related party transactions disclosed in the current year's financial accounts does not exceed threshold as shown in this Table:

Category of related party transactions

Threshold (S$)
per financial year

Purchase of goods from all related parties

15 million

Sale of goods to all related parties

15 million

Loans owed to all related parties

15 million

Loans owed by all related parties
 
15 million

All other categories of related party transactions.

Examples:

  • Service income
  • Service payment
  • Royalty income
  • Royalty expense
  • Rental income
  • Rental expense

For the purpose of determining if the threshold is met, aggregation  should be done for each category of related party transactions. For example, all service income received from related parties is to be aggregated.

1 million per category of transactions

Our team of Transfer Pricing professionals will be able to assist in reviewing and preparing contemporaneous documentation and/or global group transfer pricing policy. 

To better understand how the new requirements can impact on your business, please do not hesitate to contact our team listed above or email us at TPServices@RSMSingapore.sg.

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