The IRAS has published the first edition of the GST e-tax guide on transfer pricing on 9 November 2020. 

It is a relieve to note that the IRAS has taken a practical approach for such transfer pricing adjustments for GST purposes.  The IRAS has provided three administrative concessions where GST adjustments need not be made for transfer pricing adjustments.

1. Transfer pricing adjustment to taxable imports

If there is a transfer pricing adjustment to the value of your imported goods and if you can claim the import GST in full, there is no need to perform adjustments in your GST returns.

2. Transfer pricing adjustment to the value of standard-rated supplies

If the transfer pricing adjustments affects the value of standard-rated supplies and both you and your customers can claim the GST in full (i.e. not a partial exempt person), there is no need to perform adjustments in your GST returns.

3. Transfer pricing adjustments to the value of zero-rated and exempt supplies

If your transfer pricing adjustments affect the value of your zero-rated supplies or exempt supplies and you are not a partial exempt person, you don’t have to perform any adjustments in your GST returns.

The administrative concessions for transfer pricing make a lot of practical sense and it is in line with the approach taken when the IRAS introduced the rules for reverse charge (i.e. only requires partial exempt person to perform reverse charge).

However, it also means that the partial exempt person has another new thing to consider when preparing their GST returns.  Please refer to the IRAS e-tax guide for more details.

Eddie is the co-founder and Tax Director of Jed Tax Consulting Pte Ltd. Jed Tax Consulting is an independent GST consulting firm in Singapore, provides support to clients with all aspects of GST matters (e.g. MES renewal, ASK and ACAP review, IRAS audit queries, tax codes review and set-up, GST advisory, GST return filing and in-house training etc). Jed Tax Consulting is supported by a team of accredited tax practitioners and advisors with vast experience in IRAS and Big 4 accounting firms. 

We also work with audit and accounting firms to advise on their clients complex GST matters and in-house training.  Share This Page