To meet the 30 November 2021 deadline for contemporaneous transfer pricing (TP) documentation in Singapore, it is important for taxpayers to start putting together the right facts and analysis to support their TP outcome for FY 2020. Taxpayers whose businesses have been materially impacted by the COVID-19 pandemic may have to include additional analysis in their FY 2020 TP documentation to defend their TP positions according to the guidelines issued by the Inland Revenue Authority of Singapore (IRAS).
In this upcoming webcast, we will discuss strategies and best practices around TP compliance requirements for FY 2020, explain the implications for taxpayers related to the recent evolution of TP documentation requirements in Singapore and globally, and provide insights on developing robust TP documentation in light of the business and TP implications resulting from the COVID-19 pandemic. This would include information and analysis to be provided in the TP documentation to substantiate the arm’s length nature of related party transactions, TP outcomes arising from the COVID-19 pandemic and potential impact.
As taxpayers commence on the preparation of FY 2020 TP documentation, they should also be mindful of the implications from recent Singapore and international TP developments. During the webcast, we will also discuss the latest guidance released by the IRAS on centralized activities in multinational enterprise groups. Given the increasing focus on this topic, it is crucial for multinational groups to be able to substantiate the business considerations for centralized operations with appropriate documentation, substance, internal systems, and processes.
Based on past experiences, one of the key challenges faced by taxpayers during the TP documentation process is the alignment of TP policies and actual financial outcome. In this regard, we will also discuss the effective operational TP framework for monitoring, testing and adjustment during the TP management life cycle and technological solutions that can bridge the gap between finance, tax and information technology, thus supporting multinational businesses to reflect their TP policies on financial accounts and in financial systems, and hence achieve reduction in operating time, cost and risk.