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Taxation compliance

What is a related party transaction?

What is connected transaction?

Related party transactions refer to transactions between a company or its affiliates and related parties that directly or indirectly own rights and interests in the company. Related parties include natural persons and legal persons, and mainly refer to the promoters, major shareholders, directors, supervisors, senior executives and their families of listed companies, and companies controlled by the above-mentioned parties.

Anti-Tax Avoidance in Related Transactions -Transfer Pricing

transfer pricing

Regulating the transfer pricing system for related party transactions is an extremely important part of Singapore’s anti-avoidance system

The Inland Revenue Authority of Singapore has promulgated new regulations in 2018, formulating the transfer pricing guidelines (IRAS e-Tax Guide Transfer Pricing Guidelines, Fifth Edition) for transactions between enterprises and related parties, covering the application of the independence of related party transactions and the application of fair trading principles , Contemporaneous data preparation requirements, advance pricing agreements, etc.

In addition, starting from the 2019 tax year, it is stipulated that taxpayers need to prepare and retain contemporaneous transfer pricing documents and contemporaneous documents to show that related transactions are conducted at a reasonable market transaction price. When enterprises involved in transfer pricing transactions meet the disclosure standards set by the tax bureau, It is necessary to prepare the Transfer Pricing Documentation for reference before filing tax returns for each tax year. At the same time, a new penalty mechanism and penalty clauses that aggravate violations were introduced.

How to Apply the Tax Law?

How to apply the tax law?

The Inland Revenue Authority of Singapore stipulates the standards for companies to prepare pricing documents for related-party transactions, as shown in the following table

Categories of Related Party Transactions	Limit (SGD/ per tax year)
Purchase goods from all related parties	15 million
Sales of goods to all related parties	15 million
Loans provided to all related parties	15 million
Other categories of related transactions, such as: ● Income from service fee ● Expense from service fee ● Income from franchise royalties ● Expense from franchise royalties ● Rental income ● Rental expense ● Guarantee fee income ● Guarantee fee expense ● Others	1 million / category

1.Who needs to prepare the related transaction documents?

Companies that meet the standards for related party transactions on the left must prepare related party transaction documents (Transfer Pricing Documentation) for reference

2.What to prepare?

Prepare a related-party transaction transfer pricing report for review by IRAS. At the same time, keep all contemporaneous documents and transfer pricing documents for review. (Note: All documents must be in English)

Packages for related party transactions transfer pricing services

All supporting services

Compliance with related party transactions is an issue that must be paid attention to. Nowadays, global internationalization is the core trend. In order to improve core competitiveness, multinational companies integrate group resources through global internal supply chains to achieve synergies. The pricing of related-party transactions between groups has become a prominent tax issue. In the context of global taxation Under the circumstances, the tax bureaus of various countries have strengthened the supervision of transfer pricing.

ERI provides one-stop supporting services for transfer pricing of related-transactions. You can freely choose to complete the entire main document, local document, or choose to obtain only the comparable analysis report or comparative analysis data. Customized supporting service plans to meet your different needs. ERI upholds more than 20 years of professional service experience in the fiscal and taxation fields in Singapore, Hong Kong and China, and leverages the advantages of fiscal and taxation knowledge bridges. It has a team of experienced bilingual tax accountants to provide compliance consulting and analysis services. It is a compliance partner you can trust.

A million-level enterprise data information database, covering all necessary key data comparison for transfer pricing reports

ERI provides a million-level corporate information database in the Asia-Pacific region recognized by the Singapore IRAS , which can query more than 7 million private and listed companies over the years for transfer pricing analysis, covering general financial information, special financial ratios for transfer pricing, and transfer pricing Profit level indicators, international authoritative independence grading indicators, etc., and deeper financial indicator data, market data, industry five forces analysis and other key data for in-depth research.
One-stop transfer pricing compliance documentation solution

ERI provides a one-step transfer pricing compliance document solution, not just a general database provider. You do not need to be equipped with professional transfer pricing analysis or professional tax personnel, you can easily and quickly obtain a complete set of transfer pricing reports (main document or local document), comparable analysis reports, industry analysis reports, or just test whether transfer pricing meets the requirements of fair trade principles
Customized data analysis services

Customized in-depth data analysis services, flexible service packages and price models give you more flexible options. ERI not only provides data, after in-depth understanding of your business also could provide professional data analysis and consulting services based on your company's own characteristics. You only need to pass the key financial information required by ERI for transfer pricing analysis and compliance, and our professional tax consultant can complete the transfer pricing compliance test, data search and comparison process, key comparability analysis part and industry analysis part in the transfer pricing document according to the needs. Or a full set of transfer pricing reports, providing multiple document output modes to help you achieve compliance requirements efficiently and quickly.