Singapore Transfer Pricing Policy

Email: sin4ww@evershinecpa.com

Singapore CPA Lau Wei-Koon, speak in both English and Chinese
215 Henderson Road #03-03 Henderson Industrial Park Singapore 159554

TP-Q-10
Why kinds of scenarios will be adopted TP policy? What is relevance between DTA and TP policy?

TP-A-10
When the Singapore Tax entity would like to pay out whatever Business profits, Royalty, Technical Services fees, Interests, Trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the Singapore Treaty Page.
But if want to verify the above-mentioned amount if reasonable, will adopt Singapore TP Policy.

TP-Q-20:   
在新加坡甚麼情況下, WFOE 外商投資企業不需要同時處理TP 申報和文件申報?
What are the scenarios in Singapore, that a Wholly Foreign-Owned Entity (WFOE) is exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:
Below are the specific transactions that qualify for an exemption for TP documentation preparation.

1. Related party domestic transaction subject to the same tax rate.
2. Related party domestic loan.
3. Related party loan on which indicative margin is applied.
4. Routine support services on which 5% cost mark-up is applied.
5. Related party transaction covered by APA.
6. Related party transaction not exceeding a certain value, listed as below.

Source:  Table 2 – Threshold for exemption from TP documentation P.49 

Gross revenue (trade business) < S$10million and TP documentation is not required in the previous basis period.

TP-Q-30:   
在新加坡甚麼情況下, WFOE 外商投資企業需要向該國的稅務局發送TP 申報? 甚麼是申報單名稱?
What are the scenarios in Singapore, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration to the country’s tax bureau? What is the name of the TP declaration form?

TP-A-30:

Total Related party transactions (Local and cross border) in the accounts for the financial year > S$15million – Form for Reporting RPT.

TP-Q-40:   
在新加坡甚麼情況下, WFOE 外商投資企業需要向該國稅務局發送TP 申請和文件? 甚麼 declaration 表單名和文檔名?
What are the scenarios in Singapore, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration and TP documentation to country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:
Form for reporting RPT – Total RPT > S$15 million
Local and Master File – Gross revenue (trade business) > S$10 million or TP documentation is required in the previous basis period.
CbC Report – Consolidated UPC’s revenue > S$1,125 million in the previous year.

Singapore TRANSFER PRICING for professionals

Overview

Singapore is an OECD member and follows largely on OECD TP guidelines.
To ensure taxpayers transact with their related parties at pricing that reflects independent pricing, IRAS applies the internationally endorsed arm’s length principle.
If taxpayers do not comply with the arm’s length principle and have understated their profits, IRAS will adjust their profits upwards.
Taxpayers who meet certain conditions are required to prepare TP documentation under Section 34F of the ITA consistent with the rules prescribed by the Income Tax (Transfer Pricing Documentation) Rules 2018.

Related Party

1. Either person, directly or indirectly, controls the other person; or
2. Both persons are, directly or indirectly, controlled by a common person.
3. Related parties include branches and head offices.

Acceptable Transfer Pricing method

1. Comparable Uncontrolled Price (CUP)
2. Resale price
3. Cost-plus
4. Transactional profit split
5. Transactional net margin

Specified transactions qualify for Exemption for TP documentation preparation

7. Related party domestic transaction subject to the same tax rate.
8. Related party domestic loan.
9. Related party loan on which indicative margin is applied.
10. Routine support services on which 5% cost mark-up is applied.
11. Related party transaction covered by APA.
12. Related party transaction not exceeding a certain value, listed as below.

Due dates and respective threshold:

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Singapore Evershine BPO Service Limited Corp.
E-mail: sin4ww@evershinecpa.com

Singapore CPA Lau Wei-Koon, speak in both English and Chinese
215 Henderson Road #03-03 Henderson Industrial Park Singapore 159554

or
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please send an email to HQ4sin@evershinecpa.com
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Email address:dalechen@evershinecpa.com
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