Advanced Pricing Agreements (APAs)
- An APA is a dispute prevention facility provided under the Mutual Agreement Procedure (MAP) Article in the Singapore’s DTAs and domestic tax law. It is an arrangement between IRAS and the taxpayer or the relevant foreign competent authority to agree in advance a set of criteria to ascertain the transfer pricing of their taxpayers’ related party transactions for a specific period of time. It provides taxpayers with certainty on their transfer pricing to avoid double taxation.
- IRAS will generally accept an APA request to cover three to five future FYs (ie covered period). IRAS may consider taxpayers’ request to extend the APA to up to two FYs immediate prior to the covered period (ie roll-back years) for a bilateral or multilateral, but will not accept a similar request for a unilateral APA.
- The Singapore IRAS largely prefer bi-lateral / multilateral APAs as against unilateral APAs
- As the transfer pricing regulations are relatively recent in Singapore, we do not see a significant number of APAs on a regular basis.
Mutual Agreement Procedure (MAP)
- MAP is a dispute resolution facility provided under the MAP Article in Singapore’s DTAs16. It is a facility through which IRAS and the relevant foreign competent authority resolve disputes regarding the application of the DTAs.
- Similar to APAs, considering the relative recent introduction of transfer pricing regulations within Singapore, we have not seen a significant volume of MAP cases initiated out of Singapore.
The acceptance of a MAP or APA application is at the discretion of the competent authorities. IRAS will consider taxpayers’ request for a MAP or APA based on the merits of each case.