Transfer Pricing Adjustments on Imports
Transfer Pricing (TP) refers to the determination of transfer prices for transactions between related parties. Transfer prices for transactions between related parties must be determined in accordance with the arm’s length principle.
Other Dutiable Goods and Non-dutiable goods concerning GST
You may refer to the e-Tax Guide on details of TP adjustments on the Inland Revenue Authority of Singapore (IRAS) website.
Dutiable Motor Vehicles
For TP relating to dutiable motor vehicles, companies have to allocate the upward or downward TP adjustments on a per unit basis for each motor vehicle and report the adjustments to Customs for verification before declaring the short payment permit(s) or claiming a refund of the overpaid excise duties. The documents required are as follows:
|TP Policy and Study
|Clear explanation on how the adjustment made achieves the arm-length range for the value of imported goods
|Invoice(s) showing the amount of TP adjustment made
|List of affected make & model, engine and chassis numbers, the corresponding permit number, original Customs value, the transfer pricing adjustment amount and the final value of the motor vehicle
|Any other documents or information that may be required by Customs
Companies may submit the above documents via Singapore Customs Voluntary Disclosure Programme.
In cases where upward adjustments were made on motor vehicles and accepted by Customs, the company will have to make good on the duties and GST short-paid. The company may wish to check with IRAS on whether the company satisfies IRAS’s input tax conditions for the input tax claim on GST. The company will need to report to the Land Transport Authority of Singapore (LTA) to pay the extra Additional Registration Fee (ARF).
In cases where downward adjustments were to be made on motor vehicles and accepted by Customs, the company may apply for the refund of duties & GST. The company may wish to check with IRAS on how to include the GST ‘overpaid’ in its GST returns as its input tax claim. The company may also wish to check with LTA on the procedures to claim a refund on the ARF that is overpaid.