On 10 August 2021, the Inland Revenue Authority of Singapore published the sixth edition of its E-Tax Guide on Transfer Pricing. The most important changes are summarized as follows:

• Additional guidance on cost contribution arrangements (CCAs) and financial transactions are introduced.
• The extended chapter on related party financial transactions includes guidance on applying the arm’s length principle to related party financial transactions other than loans, such as cash pooling, hedging, financial guarantees, and captive insurance. The expanded chapter on financial transactions also includes new guidance on whether an alleged loan should be considered a loan.
• The 5% surcharge in the case of the TP adjustment (which was introduced in the 5th edition of the e-Tax Guide) is repeated in this 6th e-Tax Guide with further explanations on how the surcharge is calculated and some procedural matters.
• IRAS raises the availability of arbitration under certain Avoidance of Double Taxation Agreements (DTAs) to resolve TP disputes that cannot be settled under a MAP within a certain period, subject to certain conditions being met.
• Taxpayers should carefully review transactions related to APA claims to ensure that the transactions have legitimate commercial reasons and that the primary objective is not to reduce or avoid taxes. Taxpayers are required to explain and justify any changes to the TP method if there are no major changes in facts and circumstances.
• If TP adjustments are made by foreign tax authorities, IRAS does not allow any additional tax deduction and does not allow refunds of previously withheld taxes in the absence of a MAP application.