Home • Insights • Benchmarking Insights: Do you need to prepare a benchmarking study when entering into a related party transaction?
Whether you need to prepare a benchmarking study when entering into a related party transaction depends on the country's transfer
pricing regulations and the specifics of the transaction.
In general, benchmarking studies are used to demonstrate that related party transactions are conducted on an arm's length basis, meaning
that they are comparable to those that would have taken place between independent parties under similar circumstances. If the transaction is
subject to transfer pricing regulations, the tax authorities will request a benchmarking study as part of the transfer pricing documentation
during an audit.
For good transfer pricing governance, it is recommended to keep appropriate documentation
and records to support the arm's length nature of your transactions, in case of any future scrutiny by the tax authorities. A
benchmark study as part of the transfer pricing documentation is part best practices to support your transfer pricing position and manage
your transfer pricing risk.
Transfer Pricing Solutions is a boutique transfer pricing firm who works directly with your team, applying our experience and expertise in transfer pricing to provide, prepare, document and assist in defending your international related party transactions. Our purpose is to make a difference in the service we provide to our clients by being practical, proactive and cost effective.
We can assist your clients with the planning and preparation of transfer pricing documentation, country by country (CbC) reporting,
comprehensive transfer pricing policy, performing global and local benchmarking comparable searches, providing training designed for CFOs
and tax teams and performing transfer pricing controversy and audits.
Starting May 2026, in-scope multinational enterprise (MNE) groups must register for Singapore’s Multinational Enterprise Top-up Tax (MTT), Domestic Top-up Tax (DTT), and the GloBE Information Return (GIR) under the Multinational Enterprise (Minimum Tax) Act 2024.
For the year 2026, IRAS has updated its indicative margin, reaffirming its support for simplified, arm’s length transfer pricing practices.
Singapore taxpayers entering into financial arrangements with related parties must ensure compliance with the arm’s length principle. This includes transactions such as cash pooling, hedging, financial guarantees, captive insurance, and related party loans.
