Global Daily Tax News, Singapore Overhauls Transfer Pricing Guidance, (Jun 17, 2024)

The Inland Revenue Authority of Singapore has released a major update to its guidance on the nation's transfer pricing regime.

In section 5 of the guidance, IRAS has added new frequently asked questions regarding working capital adjustments.

Various changes have been made to Section 6, including new guidance on exemption rules for related-party domestic loans that enter into on or after January 1, 2025. These changes are also reflected in changes to section 15, in paragraphs 15, 18, and 63.

Section 6 also notes the increase in the threshold for exemption from TP documentation rules for certain transactions from SGD1m (USD738,000) to SGD2m.

Further, the guidance reinforces the requirement for taxpayers to state the date of completion of simplified transfer pricing documentation.

Finally, the agency has addressed FAQs regarding TP documentation for long-term loans and the provision of information to supplement existing TP documentation (FAQs 7 and 8 in Appendix B).

Guidance on the transfer pricing audit process has been updated in section 7.

In Section 8, the example provided in paragraph 8 has been updated, and new guidance on transfer pricing adjustments relating to capital transactions has been released in paragraphs 10 and 11.

Section 9 has been updated regarding the circumstances under which partial or full remission of the surcharge under Section 34E of the ITA will be given, in paragraphs 9(c) and 10(b).

Section 11 and Annex B2 have been updated to reflect the requirement for a pre-filing meeting before submitting a MAP application.

The guidance also includes updated guidance on strict pass-through costs, in section 14, and a new section 18, which covers government assistance.

Finally, the guidance explains changes stemming from IBOR reform, in paragraphs 40, 47, 58, and 59 of section 15.