The Inland Revenue Authority of Singapore (IRAS) has issued the 8th Edition of its Transfer Pricing Guidelines (TPG), effective 19 November 2025. The updates introduce significant compliance relief for related party domestic loans, a new optional Simplified and Streamlined Approach (SSA) for baseline distribution activities, and several clarifications on documentation, dispute resolution and PE profit attribution.<\/p>\n
For related party domestic loans entered into on or after 1 January 2025<\/em> where neither party is in the business of borrowing and lending<\/em>, IRAS will not make any transfer pricing adjustment<\/em> under Section 34D of the Income Tax Act, nor request TP documentation. Taxpayers may apply the IRAS indicative margin (any amount) or determine an arm\u2019s length rate. Interest deductibility under Section 14(1)(a) remains unchanged \u2013 a zero\u2011interest loan will not give rise to a deduction for the lender.<\/p>\n Legacy loans (entered before<\/em> 1 January 2025) continue to be governed by the interest restriction as a proxy for arm\u2019s length.<\/p>\n IRAS is implementing the OECD\u2019s SSA (formerly Amount B) on a pilot basis from 1 Jan 2026 to 31 Dec 2028<\/em>. Taxpayers may opt to apply the SSA to qualifying baseline marketing and distribution transactions if:<\/p>\n The transaction is a buy\u2011sell or sales agency\/commissionaire arrangement for wholesale distribution (excluding commodities);<\/p>\n<\/li>\n A one\u2011sided method (e.g., TNMM) can be reliably applied; and<\/p>\n<\/li>\n The tested party\u2019s operating expense to net revenue ratio is between 3% and 30%.<\/em><\/p>\n<\/li>\n<\/ul>\n The SSA uses a pricing matrix and an operating expense cap\u2011and\u2011collar cross\u2011check<\/em> (generally 10%\u201370%). Year\u2011end true\u2011up or true\u2011down adjustments are mandatory once the SSA is elected. The outcome is treated as arm\u2019s length by IRAS, but is non\u2011binding<\/em> on the counterparty jurisdiction. Double taxation may be resolved via MAP.<\/p>\n Simplified TP documentation<\/strong> now expressly requires a declaration<\/em> that a qualifying past TPD remains accurate. Without the declaration, no valid TPD under Section 34F exists.<\/p>\n<\/li>\n TPD for loans<\/strong> must be reviewed annually, but repricing is not required if evidence shows independent parties would not reprice (e.g., fixed\u2011rate comparable loans, floating rates with unchanged credit margin).<\/p>\n<\/li>\n Protective MAP<\/strong> allows a taxpayer to file a MAP application within the DTA time limit while pursuing domestic legal remedies, preserving MAP rights.<\/p>\n<\/li>\n PE profit attribution<\/strong> follows the Business Profits Article of the relevant DTA; IRAS does not<\/em> endorse the AOA\u2019s \u201cfree capital\u201d concept. A PE with no attributable profit and no other Singapore presence need not file a tax return.<\/p>\n<\/li>\n<\/ul>\n These changes take effect for YA 2026 onwards. Taxpayers should review existing related party loans, assess eligibility for the SSA, and update TP documentation practices accordingly.<\/p>\n","protected":false},"excerpt":{"rendered":" The Inland Revenue Authority of Singapore (IRAS) has issued the 8th Edition of its Transfer Pricing Guidelines (TPG), effective 19 November 2025. The updates introduce significant compliance relief for related party domestic loans, a new optional Simplified and Streamlined Approach (SSA) for baseline distribution activities, and several clarifications on documentation, dispute resolution and PE profit […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,8,6],"tags":[],"class_list":["post-3006","post","type-post","status-publish","format-standard","hentry","category-accounting","category-incometax","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/3006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=3006"}],"version-history":[{"count":1,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/3006\/revisions"}],"predecessor-version":[{"id":3007,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/3006\/revisions\/3007"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=3006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=3006"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=3006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}New Section 19 \u2013 Simplified and Streamlined Approach (SSA)<\/h4>\n
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Other Notable Updates<\/h4>\n
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