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Navigating Transfer Pricing with Advance Pricing Agreements in Singapore: A Comprehensive Guide


In today’s global business landscape, transfer pricing has emerged as a critical issue for multinational companies. To provide clarity and certainty, Singapore offers Advance Pricing Agreements (APAs) as a mechanism for taxpayers to proactively establish transfer pricing methodologies with tax authorities. This blog post explores the key provisions, application procedure, types, validity, and filing fees associated with APAs in Singapore, providing a detailed understanding of this important aspect of international tax compliance.

I. Relevant Provisions:

To engage in bilateral or multilateral APAs, there must be a double tax agreement (DTA) in place between Singapore and the involved countries. The authority to conclude APAs is derived from the provisions of the double tax treaties, Transfer Pricing (TP) Guidelines, and the APA Circular issued in October 2008. While the Inland Revenue Authority of Singapore (IRAS) generally discourages anonymous discussions on APAs, it is open to considering such requests if valid reasons are provided. The term of an APA is determined during the application process and specified in the agreement. The IRAS evaluates requests for “roll-back” years only for bilateral and multilateral APAs based on their merits.

II. Application Procedure:

The TP Guidelines and APA Circular outline a four-step process for applying for an APA:

1. Step 1 – Preliminary meeting: At least three months prior to the intended APA application, the taxpayer arranges a preliminary meeting with the IRAS. During this meeting, the taxpayer presents information about the company’s business model, industry environment, key transactions, etc. The IRAS provides feedback on any follow-up actions or additional information required. For bilateral and multilateral APAs, similar meetings must be held with the relevant foreign tax authorities, and their agreement for a bilateral/multilateral APA must be obtained. The formal APA application should be submitted to the IRAS within three months from the receipt of the IRAS’s indication that the application can be submitted.

2. Step 2 – Formal submission of an APA request: The taxpayer submits a formal APA request no later than six months before the first day of the proposed APA period. The submission should include information such as the general nature of the business, industry environment, global corporate structure, proposed transfer pricing methodology and analysis with critical assumptions, information and analyses needed to produce arm’s length results for related party transactions, and any additional information requested by the IRAS or other tax authorities.

3. Step 3 – Review and negotiate the APA: Upon receiving the formal application, the IRAS initiates the examination process. In the case of a bilateral APA, the IRAS contacts the relevant foreign competent authorities. This stage may involve meetings with taxpayers for clarification, requests for additional information, site visits, consultations, and negotiations with foreign competent authorities.

4. Step 4 – Post-agreement meeting and implementation: Once an agreement is reached, the IRAS organizes a meeting with the taxpayer to discuss the details and implementation of the APA. This includes compliance and monitoring requirements. The revised transfer pricing guidelines issued in January 2015 provide further guidance on the step-by-step procedures and offer sample documents, such as the letter of authority and a sample APA. The guidelines also outline the minimum information required for pre-filing meetings and provide instructions on preparing the annual compliance report during the APA’s validity.

III. Types of APAs Available:

Singapore offers both unilateral and bilateral APAs. Unilateral APAs are applicable when related transactions involve jurisdictions without a Double Tax Treaty (DTT) with Singapore, while bilateral APAs are employed when a DTT exists between Singapore and the relevant jurisdiction.

IV. Validity:

The maximum term of an APA in Singapore is five years. However, taxpayers can request a roll-back of the APA to previous periods. The IRAS provides examples in its guidance on APA periods and roll-back years, enabling taxpayers to understand and apply these provisions effectively.

V. Filing Fee:

For bilateral or multilateral APAs, no filing fees are required. However, for unilateral APAs involving jurisdictions without a DTT with Singapore, an administrative fee is applicable.


Advance Pricing Agreements (APAs) serve as an effective tool for multinational companies to establish transfer pricing methodologies and gain certainty in their tax positions. Singapore’s clear provisions, well-defined application procedure, and adherence to international standards make it an attractive jurisdiction for businesses seeking to avoid transfer pricing disputes. By engaging in bilateral and multilateral APAs, taxpayers can ensure compliance, mitigate the risk of double taxation, and foster a cooperative relationship with tax authorities. It is crucial for businesses operating in Singapore to familiarize themselves with the APA process and leverage the guidance provided by the IRAS to navigate the complexities of transfer pricing effectively.

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