According to the draft Income Tax (Amendment) Bill 2017 (Draft Bill) proposed on 19 June 2017, section 34D of the Singapore Income Tax Act (SITA) would be expanded to provide clarification on the meaning of arm’s-length conditions. The proposed amendments provide for re-characterization of related -party transactions if it is found that arm’s-length parties would not have entered into similar arrangements. In addition, it is proposed that any amount of income that is increased under Section 34D be treated as accruing in, derived from or received in Singapore.
The requirement to prepare TPD will only apply to businesses with turnover exceeding S$10 million. This S$10 million turnover serves as an additional safe harbour to the existing thresholds.
The draft Bill specifically requires the documentation to be retained for 5 years.
