Income Tax (Transfer Pricing Documentation) Rules 2018

SECOND SCHEDULE

Rule 3(1)(a)

Information in transfer pricing documentation

Description of information of group

1.—(1) An overview of the businesses of the applicable entity’s group that are relevant to the group’s business in Singapore in the basis period in which the transaction takes place, including —

(a)

the group’s worldwide organisational structure that shows the location and ownership linkages among all related parties of the group transacting with the applicable entity in that basis period;

(b)

a description of the group’s businesses that are relevant to the business of the applicable entity in that basis period, including —

(i)	the group’s businesses, products and services, geographic markets and key competitors in that basis period;
(ii)	a description of the supply chains of those businesses, products and services;
(iii)	the group’s business models and strategies in that basis period;
(iv)	the business drivers of the group’s business profit in that basis period;
(v)	the industry, market, regulatory and economic conditions in which the group operates in that basis period;
(vi)	the business activities of each entity in the group and the functional analysis describing their contributions, including functions performed, assets used and risks assumed, in that basis period; and
(vii)	changes to the group’s structure through restructuring, acquisition or divestiture in that basis period.

(c)

a description of the group’s intangible assets that are used in or applied to the business of the applicable entity in Singapore in that basis period, including —

(i)	a description of the group’s strategy for the development, ownership and exploitation of intangible assets in that basis period, including the location of research and development facilities and the location from which research and development is managed;
(ii)	a list of those intangible assets and the names of the entities that have legal ownership of those assets;
(iii)	a list of agreements among related parties concerning those intangible assets, including cost contribution arrangements, cost sharing agreements, research service agreements and licence agreements;
(iv)	a description of the group’s transfer pricing policies relating to research and development and to those intangible assets in that basis period; and
(v)	a description of any transfer in that basis period of interests in those intangible assets among related entities, including the names of those entities and the countries they carry on business in, and the amount of compensation involved;

(d)

a description of the group’s financial activities that are connected to the business of the applicable entity in Singapore in that basis period, including —

(i)	the group’s financial activities in that basis period, including the group’s inter‑entity financial activities and financing arrangements with lenders who are not related parties;
(ii)	identification of any entity of the group that provides a central financing function for the group in that basis period; and
(iii)	a description of the group’s transfer pricing policies relating to financing arrangements between related parties in that basis period;

(e)

financial statements of the group relating to the business of the applicable entity in Singapore in that basis period; and

(f)

a list and a description of the group’s unilateral advance pricing arrangements, and other tax rulings that relate to the allocation of the group’s income among countries, that are in force.

(2) In sub‑paragraph (1)(f), a group’s unilateral advance pricing arrangement is an agreement on the transfer pricing criteria to be used in relation to one or more transactions between an entity in the group and one or more related parties of the entity over a specified period, being an agreement that is made between —

(a)	the entity; and
(b)	the Comptroller or an authority of a country outside Singapore.

Description of information of applicable entity

2.—(1) Information of the applicable entity’s business and its transactions with its related parties in the basis period in which the transaction takes place, including —

(a)

the management structure showing the reporting lines between the related parties and the management staff of the applicable entity in that basis period;

(b)

the organisational structure of the applicable entity, showing the number of employees in each department, as at the end of that basis period;

(c)

a description of the applicable entity’s business in that basis period, including —

(i)	the business, products and services, geographic markets and key competitors in that basis period;
(ii)	the industry, market, regulatory and economic conditions in which the applicable entity operates in that basis period;
(iii)	the applicable entity’s business models and strategies in that basis period; and
(iv)	changes to the applicable entity’s structure through restructuring, acquisition or divestiture in that basis period;

(d)

a description of transactions between the applicable entity and its related parties in that basis period, including —

(i)

details of each transaction, including the identity of the related party, country in which the related party is incorporated, registered or established, the relationship between the applicable entity and the related party, and the value of the transaction;

(ii)

the contract or agreement showing the terms of each transaction;

(iii)

a functional analysis describing the functions performed, the assets (including intangible assets) used or contributed, and the risks assumed by each party to each transaction; and

(iv)

a copy each of the group’s advance pricing arrangements and other tax rulings —

(A)	to which the Comptroller is not a party;
(B)	that are relevant to each transaction; and
(C)	that are in force; and

(e)

a transfer pricing analysis to ascertain whether the conditions made or imposed between the applicable entity and its related party with respect to the transaction are arm’s length conditions within the meaning of section 34D(1)(b) of the Act, including —

(i)

a comparability analysis to compare the conditions made or imposed between the applicable entity and the related party with respect to the transaction, with those made or imposed between parties dealing independently with one another in comparable circumstances;

(ii)

the tested party or tested transaction and the transfer pricing method used, and the basis for their selection;

(iii)

a description of the application of that transfer pricing method, including —

(A)	a list and description of selected comparable companies or transactions;
(B)	the basis for selecting the comparable companies or transactions;
(C)	financial data of the comparable companies or transactions;
(D)	assumptions made; and
(E)	information and documents to support any adjustments made to achieve comparability between the tested party or tested transaction and the comparable companies or transactions (where applicable);

(iv)

the arm’s length price and the computations made in arriving at that price; and

(v)

financial information of the transaction in applying the transfer pricing method and the basis for deriving such financial information (where applicable).

(2) In sub‑paragraph (1)(d)(iv), a group’s advance pricing arrangement is an agreement on the transfer pricing criteria to be used in relation to one or more transactions between an entity in the group and one or more related parties of the entity over a specified period, being an agreement that is made —

(a)	between 2 or more authorities of countries outside Singapore; or
(b)	between the entity and an authority of a country outside Singapore.

Definitions

3.—(1) In this Schedule, “arm’s length price”, “comparability analysis” and “tested party” or “tested transaction” have the meanings given to them, or are explained, in the IRAS e‑tax guide.

(2) In this Schedule, the business of a group of an applicable entity is relevant to the business of the group in Singapore, or of the applicable entity, if the latter business is identical or similar in nature to, or is part of, or is otherwise connected to, the former business.

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