IRAS will pilot the SSA from 1 January 2026 to 31 December 2028. During this period, taxpayers may optionally apply the SSA to qualifying transactions if they meet the required conditions, and any outcomes under the SSA will be accepted as arm’s length.
The Inland Revenue Authority of Singapore (IRAS) updated its transfer pricing guidance on 19 November 2025, introducing a new section outlining the simplified and streamlined approach (SSA) for pricing qualifying baseline marketing and distribution transactions between related parties.
Simplified and Streamlined Approach for Baseline Marketing and Distribution Activities
The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“OECD TPG”) provide an optional simplified and streamlined approach (“SSA”) that simplifies and streamlines the pricing for qualifying baseline marketing and distribution transactions between related parties.
IRAS is implementing the SSA on a pilot basis from 1 January 2026 to 31 December 2028 (“pilot implementation period”). For any financial year beginning during this pilot implementation period, taxpayers can choose (i.e., it is optional) to apply the SSA on their qualifying transactions when they meet the qualifying conditions. The SSA will be treated as providing an arm’s length outcome.
The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (“Inclusive Framework”) political commitment for covered jurisdictions
The outcome determined under the SSA by a jurisdiction that has chosen to apply the SSA to qualifying transactions of its taxpayer is non-binding on the counterparty jurisdiction where the related party to the qualifying transaction is located. However, subject to their domestic legislations and administrative practices, members of the Inclusive Framework, including Singapore, commit to respect the outcome determined under the SSA where such approach is applied by a covered jurisdiction under certain circumstances.
In this regard, where there is an Avoidance of Double Taxation Agreement (“DTA”) in effect between Singapore and a covered jurisdiction, Singapore is committed:
- To respect the outcome determined by that covered jurisdiction in accordance with the SSA under Annex to Chapter IV of the OECD TPG as an arm’s length outcome for a qualifying transaction between a taxpayer in Singapore and its related party in that covered jurisdiction; and
- To take all reasonable steps to relieve potential double taxation that may arise from the application of the SSA by that covered jurisdiction.
This political commitment is applicable from 1 January 2025 to 31 December 2029.
Singapore currently has effective Double Taxation Agreements (DTAs) with a wide range of jurisdictions, including Albania, Armenia, Belarus, Brazil, Egypt, Fiji, Georgia, Jordan, Kazakhstan, Malaysia, Mauritius, Mexico, Mongolia, Morocco, Nigeria, Pakistan, Papua New Guinea, the Philippines, Serbia, South Africa, Sri Lanka, Thailand, Tunisia, Ukraine, Uzbekistan, and Viet Nam.
Earlier, the IRAS released updated transfer pricing guidelines on 2 January 2025, lowering the indicative margin for related-party loans to +170 basis points (1.70%) from +220 basis points (2.20%) for the period 1 January to 31 December 2025.
