The Inland Revenue Authority of Singapore (IRAS) has issued a consultation paper requesting comments on a revision to their transfer pricing (TP) guidelines. The particular questions for which comments are requested, no later than 24 September, consist of the following:
- Challenges in preparing TP documentation contemporaneously
- Difficulties in obtaining group and entity information in Annex A of the paper
- Examples of low-risk documentation areas
- Frequency of documentation updates
A link is provided for reference to the consultation paper:
Click to access pconsult_IT_Transfer%20Pricing%20Documentation_2014-09-01.pdf
- TP documentation to be organized in alignment with the OECD master file and local entity reporting methodology.
- TP documentation not applicable for routine services with a 5% safe harbour mark-up
- Inadequate TP documentation will lose the support of IRAS in MAP discussions to resolve double taxation.
- Annex A provides additional requests for group information that may be the source of requested comments, including:
- Worldwide organization chart
- Group’s business models and strategies
- Profit drivers, including a list of legal ownership for intangibles
- Supply chain activities and functions
- Business relationships among all related parties
- Group’s transfer pricing policies for all types of transactions between related parties
- Consolidated group financial statements
Singapore is a jurisdiction (and there may be many more) that is reviewing the OECD’s Action Plan country-by-country reporting template and forthcoming comments as a base upon which to expand TP reporting.
Multinationals will need to capture every country’s additional legislative requirements arising from the OECD’s Action Plan. The additional complexity, cost and time will place a further constraint upon the ability to provide information perceived to be directly relevant for every jurisdiction around the world. Additionally, the threat of lack of support for the MAP process via a determination of inadequate TP documentation (if legislated into law) will increase the risk of double taxation and TP appeals worldwide.
All interested parties should take time to submit comments prior to the 24 September deadline.
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