Changes in transfer pricing in Singapore
IRAS is reviewing how it's practised by S'pore taxpayers. Companies would do well to pay heed to ensure compliance with the arm's-length principle.
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TRANSFER pricing has become a buzzword of late, not only in the international tax arena, but also for companies here in Singapore.
Transfer pricing - which has to do with the prices charged in transactions between related companies within a group - has been singled out (rightly or wrongly) by tax authorities in developed countries as the key modus operandi by which some major multinationals have shifted profits from high-tax jurisdictions to low-tax ones.
Tax authorities argue that this results in these MNCs not paying their fair share of tax, leading to less tax revenues to fund public goods, which may mean that small and medium-sized enterprises (SMEs) and individuals have to shoulder the extra burden.
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