Transfer pricing is the price of goods and services between departments in the same company. The main basis of a transfer pricing is to always lower the price of tax paid by that company and it turn the company’s able to make a lot of profits by the end of financial year.
The IRAS in Singapore first documented in 2019 that there should be mandatory documentation for transfer pricing. Failure to which there are tax penalties. But what really are the requirements to be eligible for the transfer pricing? What’s the gst ask Singapore?
Below are some of the requirements needed by the Singapore tax authority. You can understand more through the transfer pricing services.
For a company to qualify for a transfer pricing documentation, first, there are conditions that they have to meet.
A company has to make justification over their transfer pricing execution. A bench marking is normally done to that company to ascertain that there is a detailed assessment of assets, functions, and risks managed by the parties. Also a quantitative assessment of the pointed out margins has to be done so that they can determine if they qualify for a tax payers transfer pricing policy.
A company should have documents that cover an overview of the departments business in which the company is part of.
A Singapore company is required to prepare and keep a pricing document if the company meets the following conditions. The gross revenue derived from its trade is more than S$10 million dollars for tax basis period. Another requirement is if the documentation was specifically requested from the previous tax period.
This particular TP documents should be provided before the time for filing the tax returns is due.
The transfer pricing document should be kept for at least five years or from when the period took place.