What is Transfer Pricing
Transfer pricing is the pricing of goods, services and intangibles between related parties.
Transfer Pricing Regime
Mandatory ‘Section 34F Transfer Pricing Documentation’ applicable from Year of Assessment (YA) 2019 based on certain conditions. Penalty introduced for non-compliance.
Transfer Pricing Regime in Singapore – Beginning of a New Chapter
What is in it for Businesses
- Transfer Pricing policies to be in place
- Related party transactions to be recorded accurately
- Arm’s length principle to be followed for related party transactions
- Back-up evidence/ documents to support adherence to arm’s length principle
- Transfer Pricing documentation to be prepared and maintained on a contemporaneous basis by the due date
- Reporting of related party transactions in the prescribed form
- The possibility of an enquiry from the IRAS regarding related party transactions
Our Transfer Pricing Services
1. Singapore Transfer Pricing Documentation
- Assistance in reviewing the existing Transfer Pricing policies and the supporting TP documentation being maintained by the multi-national group
- Suggest improvements to the existing Transfer Pricing policies keeping in view the local rules and regulations/ OECD Guidelines/ BEPS Action Plans
- Assistance in preparation of mandatory Transfer Pricing documentation as per Second Schedule of Income Tax (Transfer Pricing Documentation) Rules, 2018
- Assistance in preparation of Transfer Pricing Documentation for commodity marketing and trading entities based on the First Edition of the e-tax guide on ‘Transfer Pricing Guidelines: Special Topic – Commodity Marketing and Trading Activities’
2. Transfer Pricing Audit Defense
- Assist with Transfer Pricing audit
- Preparation of comprehensive response to the audit questionnaire issued by the IRAS
- Conduct risk profiling vis-à-vis potential outcomes
- Continuous discussion with the key stakeholders regarding the resolution strategies
- Meeting the Revenue Officer, if called upon to explain the facts of the case and present the Transfer Pricing positions adopted for related party pricing
- Assist with the field visit by the Revenue Officers
- Assist with the follow-up response filing required with the IRAS upon field visit
- Help with the conclusion of the audit proceedings and suggest the way forward
3. Transfer Pricing Advisory
- Assessment of inter-company agreements to ensure that they are prepared in accordance with the generally recognised Transfer Pricing guidelines and backed by appropriate price-setting (arm’s length price) documentation
- Royalty benchmarking (including benefit analysis) to determine an appropriate return that attributes to the Group entities based on DEMPE (Development, Enhancement, Maintenance, Protection, Exploitation) functions
- Show the benefits analysis and relevant methodology of cost allocation in the management charges documentation
- Assess the arm’s length interest rate via loan benchmarking
- Determine arm’s length price for proposed related party transactions such as support services, sourcing of raw materials, etc
