IRAS Announces New Transfer Pricing Consultation Program

by Mary Swire, for LawAndTax-News.com

19 August 2008

The Inland Revenue Authority of Singapore (IRAS) has increased its focus on transfer pricing with the introduction of the Transfer Pricing Consultation (TPC) program, it announced earlier this month.

The purpose of the TPC program will be to review and assess Singapore taxpayers on their level of compliance with Singapore’s transfer pricing guidelines, released in 2006. IRAS’s Circular on the TPC was published on 6th August, and is a revision of the version published on 31st July 2008.

IRAS revealed at the time that it would shortly be sending out questionnaires to select taxpayers to receive a visit in the course of the TPC.

Participation in the TPC process could involve a field visit by an IRAS officer at the taxpayer’s premises during which additional information, such as contracts or agreements and clarification of facts, may be requested, IRAS announced.

The tax authority went on to explain that the taxpayer would need to present, during the field visit, details of related party transactions, how they were priced, and any third party comparable information that has been used.

IRAS revealed that it would look specifically at:

• The adequacy and timeliness of the taxpayer’s transfer pricing documentation;
• Any reservation regarding the transfer pricing methodology adopted by the taxpayer;
• IRAS’s assessment of the taxpayer’s transfer pricing risk, taking into account the commercial realism of its business results and the quality of its documentation; and
• How the documentation or methodology may be improved.

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