Asia-Pacific Transfer Pricing Handbook

Chapter Twenty-Four

Singapore Implements Advance Pricing Arrangement Procedure

The Inland Revenue Authority of Singapore (IRAS) implemented Singapore’s advance pricing arrangement (APA) procedure on October 20, 2008, through the issuance of a supplementary circular. This detailed APA procedure implements Section 6 of Singapore’s transfer pricing guidelines that the IRAS had issued on February 23, 2006. As a general matter, Singapore permits a Singapore taxpayer to undertake an APA in one of two forms:1

1. The taxpayer can enter into an APA that is a unilateral arrangement involving the taxpayer and the IRAS standing alone.

2. The taxpayer can enter into a bilateral agreement or a multilateral agreement that involves agreement between Singapore and one or more of its tax treaty partners.

Two specific APA facets of the Singapore APA procedure are particularly relevant to U.S. taxpayers:

1. The United States and Singapore do not have an income tax treaty (except for airlines). As such, the Singapore and the United States cannot form a bilateral APA. Nevertheless, such a taxpayer might choose to consider implementing a matched unilateral APA agreement.

2. The Singapore supplementary circular does not permit a taxpayer to enter into a roll back in the case of unilateral APAs.

OBJECTIVES OF THE SUPPLEMENTARY CIRCULAR

The IRAS issued the supplementary APA circular to achieve three specific objectives:2

1. To provide the taxpayer with the considerations and procedures that the taxpayer ...