Transfer Pricing - Singapore
The Singapore TP Guidelines apply to all related-party transactions of goods, services and intangible properties. They also apply to both legal entities and taxable entities, such as permanent establishments (PEs) of foreign companies in Singapore. Related-party transactions between entities that are both in Singapore are within the scope of the guidelines as well. However, there are safe harbour thresholds for exemption to prepare transfer pricing documentation 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.
The TP legislation will, inter alia, formalize the existing transfer pricing requirements. The requirements to prepare the documentation no later than the filing deadline of the tax return and to submit the documentation to IRAS within 30 days of a request by IRAS are also affirmed and codified in the new legislation. The new TP legislation also specifically requires taxpayers to retain the documentation for 5 years. As announced by IRAS on 16 June 2016, Singapore is a party to the Inclusive Framework for the global implementation of the BEPS Project as proposed by the OECD and endorsed by G20 in February 2016.