Transfer Pricing

On 2 October 2017, the Income Tax (Amendment) Bill 2017 (“ITB 2017”) was passed by Parliament. The ITB 2017 includes specific transfer pricing (“TP”) related changes to strengthen Singapore’s TP regime, such as the introduction of a new Section 34F which imposes a mandatory requirement for contemporaneous and adequate TP documentation (“TPD”), and penalties for non-compliance from the basis year for the Year of Assessment (“YA 2019”). On 22 February 2018, the Income Tax (Transfer Pricing Documentation) Rules 2018 (“TPD Rules”) was gazetted and IRAS issued the updated 5th edition of the Singapore Transfer Pricing Guidelines (“5th Ed TPG”) the following day.

The TPD Rules and the 5th Ed TPG set out in detail the workings of Singapore’s reinforced TP regime. Pertinent points include clarifications made to the arm’s length principle, expanded TPD requirements, and new powers of the Comptroller of Income Tax (“Comptroller”) to impose surcharges and penalties for TP non-compliance.

Transfer pricing documentation requirements


Previous requirement
under 4th Ed TPG

New requirement
under 5th Ed TPG

Who must prepare

Not expressly specified. Companies are required to prepare TPD upon exceeding certain related party transaction thresholds.

Taxpayers fulfilling either of the two conditions below must prepare TPD:

a. Taxpayers with gross revenue from their trade or business1 for the basis period of more than $10 million

b. Taxpayers who were required to prepare TPD under Section 34F for the previous basis period will continue to be required to do so for the subsequent basis period2

Exemptions available

Taxpayers are exempt from preparing TPD for transactions undertaken with their related parties in a basis period in any of the following cases:

  • Related party domestic transaction subject to the same tax rate

  • Related party domestic loan

  • Related party loan on which indicative margin is applied

  • Routine support services on which 5% cost mark-up is applied

  • Related party transaction covered by advance pricing arrangement

  • Related party transaction not exceeding certain thresholds (e.g., S$15 million for sales / purchases of tangible goods and S$1 million of intercompany services)

Exemptions under the 4th Ed TPG still apply. In addition, taxpayers are also exempted where the gross revenue of taxpayer is consistently below S$10 million.

Format of report

Must be in English.

Must be in English and must specify the date on which the TPD was completed.

Content of report

As prescribed in the 4th Ed TPG.

As prescribed in the Second Schedule of the TPD Rules.

When to prepare

Not later than the filing due date of the tax return.


When to submit

IRAS does not require taxpayers to submit the TPD when they file their tax returns. Taxpayers should keep their TPD and submit it to IRAS within 30 days upon request.


When to refresh

Taxpayers should update their TPD when there are material changes to the operating conditions that impact their functional analysis or transfer pricing analysis. In any case, IRAS encourages taxpayers to update their TPD at least once every three years.

Past TPD can be used as “qualifying past TPD” for two additional YAs, subject to meeting out certain conditions in the current basis period. Taxpayer must make a formal declaration.

How long to retain

5 years.

5 years.

Penalty for non-compliance

Not specified, reference is only made to Section 94(2) of the Income Tax Act on record keeping requirements.

Fine not exceeding S$10,000.

1Gross revenue derived from a trade or business excludes passive source income such as dividends, capital gains and losses. Taxpayer that only has passive source income will not come within TPD requirements of Section 34F.

2Condition (b) is put in place to ensure that taxpayers continue to prepare TPD once they are required to do it under condition (a). This provides certainty to taxpayers on their compliance efforts, especially where any decline in their gross revenue below S$10 million is temporary.


Our team of Transfer Pricing professionals will be able to assist in reviewing and preparing contemporaneous documentation and/or global group transfer pricing policy. 

To better understand how the new requirements can impact on your business, please do not hesitate to contact our team listed above or email us at [email protected].

Transfer Pricing Updates


koh-puay-hoon - Copy.png

Koh Puay Hoon
Partner & Head of Tax

T: +65 6594 7820
E: [email protected]

cindy-lim - Copy.pngCindy Lim 

T: +65 6594 7852
E: [email protected]

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T: +65 6594 7860
E: [email protected]