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Allen Tan

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Allen Tan is the head of the Tax, Trade and Wealth Management practice in Baker McKenzie Wong & Leow. He has extensive experience working on both international and local tax issues, with a special focus on the regional tax aspects of the transactions that he is involved in. Allen’s clients include Global Fortune 500 multinational corporations and major Singapore conglomerates. He is recognised as a leading lawyer for his tax controversy and corporate tax work in many leading legal and tax directories including International Tax Review, Chambers Asia Pacific and Legal 500 Asia Pacific. Allen was also named the Asia Tax Practice Leader of the Year 2018 by International Tax Review.

The Inland Revenue Authority of Singapore (‘IRAS’) updated its transfer pricing guidelines on 10 August 2021, with the release of the IRAS e-Tax Guide: Transfer Pricing Guidelines (Sixth Edition).. IRAS has provided additional guidance and clarification with respect to TP documentation compliance, surcharges on TP adjustments, advanced pricing arrangements and mutual agreement procedure requests.

From November 2020 to April 2021, there have been three reported decisions by the High Court and Court of Appeal involving tax controversies with the Inland Revenue Authority of Singapore. Two of these decisions involved disputes under the Income Tax Act. The final case relates to a decision concerning the assessment of property tax, and the interpretation of certain terms under the Property Tax Act.

From November 2020 to April 2021, there have been three reported decisions by the High Court (HC) and Court of Appeal (CA) involving tax controversies with the Inland Revenue Authority of Singapore (IRAS). Two of these decisions by the HC involved disputes under the Income Tax Act (ITA). The first case pertained to the application of the general anti-avoidance provision in s 33 of the ITA, and the second case concerned the taxability of an employee’s severance payment under s 10(2)(a) of the ITA.

Due to the strategic location and the business-friendly environment that Singapore offers, many multinational enterprise (MNE) groups have centralized operations in Singapore, and they often function as the global/regional headquarters (HQ) of the MNEs. With increasing focus on these structures and the associated transfer pricing arrangements (both domestically and overseas), the Inland Revenue Authority of Singapore (IRAS) published an e-tax guide entitled “Transfer Pricing Guidelines Special Topic – Centralized Activities in Multinational Enterprise Groups” (“Guide”) on 19 March 2021 to provide administrative guidance on determining an arm’s length remuneration for centralized activities in Singapore.

In this alert, we discuss the Guide, and provide transfer pricing insights for HQs located in Singapore.

In brief On 15 June 2020, the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2020 came into force. Among other legislative changes, the key amendments provide an avenue for the Pioneer Industry, Pioneer Service and Development and Expansion Incentive awards previously approved and granted to a company to…