Tue, Jul 9, 2019
On May 24, 2019, the Inland Revenue Authority of Singapore (“IRAS”) released the transfer pricing guidelines for commodity marketing and trading activities (the “e-Tax Guide”), which outlines various factors that may affect the economic value attributed to such activities. These include discussions on appropriate application of transfer pricing methods and highlights common functions and benefits relating to various commodity marketing/trading activities in Singapore.
In summary, the e-Tax Guide addresses the following main points:
While taxpayers are not mandated to comply with this e-Tax Guide, this guidance has been issued with the aim of enabling Singapore taxpayers with related-party commodity transactions to analyze their operations in relation to justifying economic substance for commodity marketing/trading activities. By extension, such justification is intended to defend the profitability levels earned in Singapore for such functions against future scrutiny arising from other tax jurisdictions relevant to a multi-national group’s operations.
The e-Tax Guide is available here.
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