Transfer pricing documentation (local/master/country by country), liaising with the tax authorities and defending your transfer pricing reports when faced with tax audits. We help in negotiating Advance Pricing Arrangements (“APAs”) or mutual agreement procedures (“MAPs”). We serve clients from various industries and jurisdictions.
What is transfer pricing documentation report about?
Transfer pricing documentation report is a report that showing whether the transactions entered into between related companies within a group of companies are at arm’s length. Arm’s length means that the prices or margins of these intercompany transactions are comparable to what would have been entered into between outside or unrelated parties.
Who are the companies that is required to prepare transfer pricing report?
Companies whose annual revenue is at least S$10 million for each financial year and the related party transactions value (excluding loans) exceed S$ 1 million whereas for loan, the transaction value must exceed S$ 1.5 million.
What are the deadlines for preparing transfer pricing reports?
The deadline is before end of November for paper submission or 15th December for electronic submission.
We ensure that the transfer pricing documentation complies with individual local country Transfer Pricing framework and regulations as well as the OECD transfer pricing documentation requirements. We support our clients in the resolution of queries from local or overseas tax authorities and helped them to defend their transfer pricing policies and documentation.
Our international portfolio includes clients from India, China, Australia, Malaysia, Thailand, Philippines, Vietnam, Indonesia and Singapore. We assist companies on the defence of their transfer pricing arrangements with the respective tax authorities. Additionally, we advised MNE and listed companies on complex transfer pricing issues, and we have extensive experience in the manufacturing, high technology, hospitality, and healthcare industries.
What is transfer pricing about and how does it affect you
Due to increased scrutiny by tax authorities around the world, transfer pricing has become one of the riskiest areas for multinational corporations from both the compliance and tax planning perspectives. Amazon, AOL, Adobe, Hewlett-Packard, Microsoft, and other multinationals have all made the headlines in recent years because of transfer-pricing disputes over potential adjustments to income ranging from tens of millions to upward of a billion dollars. However, if you think transfer pricing affects only big companies, think again. The only condition that triggers transfer pricing is the existence of multiple facilities in more than one taxing jurisdiction.
We advise companies on how they can best manage their transfer pricing life cycle. The life cycle consists of four phases: planning, implementation, documentation, and monitoring. While most companies have focused their efforts on the first three phases, the changing tax landscape has made it necessary for companies to manage new pressures, such as increased data collection and information sharing among tax authorities, through the active monitoring of their transfer pricing positions. It is important that companies develop a clearly defined process to manage and mitigate their transfer pricing risks.
Why do we conduct benchmarking analysis/studies ?
Benchmarking studies are an important part of any transfer pricing documentation and are a necessary defence for compliance purposes. They are carried out to understand how a company prices its related party transactions, and seek to validate that their pricing was done at arm’s length by reference to independent and comparable transactions.
The purpose of conducting a benchmarking study is to determine the general conditions surrounding the transactions conducted by third parties in a given market. Such studies help to generate a range of values, i.e. the so-called arm’s length range or mark-up range. Statistically, arm’s length range is defined by the lower quartile and upper quartile and is the range of values of price or profit attached to the comparable transactions between comparable unrelated parties.
When a transfer price determined by a taxpayer for a transaction under review (or the profitability derived by taxpayer from such transaction) is not found in the applicable arm’s length range, the tax authority will determine the arm’s length price using the median value of that arm’s length range.
Our achievements include:-
Defended a client who has a subsidiary in Batam, Indonesia that is involved in the manufacturing of paper cartons and boxes on transfer pricing matters and devised their transfer pricing policies and documentation.
Devised transfer pricing documentation for a large main-board listed company in the leather furniture business with factories in Southern China and responsible for liaising with the local tax department.
Devised transfer pricing documentation for a local property agent services firm with operations in China.
Devised transfer pricing documentation for an investment holding company involved in intercompany service fee charge with China parent company.
We have a team of highly qualified in-house experts:
- Masters of International Taxation (New South Wales);
- Accredited Tax Advisor (Income Tax & GST), SCTP Singapore;
- Chartered Tax Adviser (Australia), Tax Institute of Australia;
- Fellow of the Taxation Institute of Hong Kong (TIHK);
- Member of the Tax Executive Institute (TEI),USA;
- Advanced Diploma in International Tax, Chartered Institute of Taxation;
- Advanced Professional Certificate in International Taxation (APCIT).