The e-Tax Guide consolidates and expands earlier transfer pricing guidance, and elaborates on a number of transfer pricing items and concepts. The guidance is an amalgamation and expansion of previous IRAS transfer pricing guidance, and is supported by certain sections of the Singapore Income Tax Act, including Section 34D (Transactions not at arm’s length), as well as sections 32 and 53.
The transfer pricing guidance elaborates on a number of transfer pricing items and concepts, as well as IRAS viewpoints as to how they are to be treated by taxpayers, including:
Even if the transaction is exempted from documentation, it still must be compliant with the arm’s length pricing.
It appears that the IRAS intends to foster greater transfer pricing compliance, not only through clarification of its expectations, but also through reminders of its audit program and penalties for non-compliance. On the other hand, the IRAS recognises the need to reduce the compliance burden for taxpayers with small related-party transactions or transactions with little risk of tax leakages. As a next step, it will be important for companies to review their transfer pricing compliance and whether their existing documentation is adequate, given the expanded requirements. Accordingly, companies with significant related-party transactions will need to evaluate the extent of their transfer pricing compliance in a systematic manner.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in 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.