On January 13th, 2017, the Inland Revenue Authority of Singapore (IRAS) issued updates to its e-Tax Guide and online directive regarding the state’s transfer pricing regulations.
In its latest directive, the IRAS have enhanced the online guidance regarding the arm’s length principle & risk analysis process. The applicable paragraphs of the directive have been amended to note that profits should be taxed where the real economic activities that are generating income are performed and where value is created, specifically.
Additionally, the updated guidance puts in place an indicative margin for taxpayers’ related-party loans. The indicative margin may be applied to each related-party loan that does not exceed SGD $15m at the time the loan is attained or provided, after January 1st, 2017. The threshold is based on the loan committed and rather than utilised.