Oct 5, 2026  · Adriana Calderon - Cofounder and Lead Partner at Transfer Pricing Solutions Asia.

Transfer pricing season is here. Singapore companies file their corporate income tax return for Year of Assessment 2026 by 30 November 2026, and transfer pricing documentation should be ready by then. The good news is that a little preparation now goes a long way. Well-prepared documentation lets you explain your related party pricing in your own words, with confidence, whenever the Inland Revenue Authority of Singapore asks.

Here is what is new this season, a few common myths cleared up, and some friendly questions to help you see where you stand.

What is new this season

Date	Update	What it covers
July 2026	Guidance on the Related Party Transactions Form updated	A related party can include an individual shareholder or director
4 June 2026	9th Edition of the Transfer Pricing Guidelines	Share-based compensation in intercompany service fees
19 November 2025	8th Edition of the Transfer Pricing Guidelines	Documentation timing, related party loans and transfer pricing adjustments

A fresh look at related party loans

The 8th Edition also updates how the Inland Revenue Authority of Singapore looks at loans between related parties from a transfer pricing perspective. In short:

• Character comes first. The starting point is whether the funding is truly debt or equity, and whether the arrangement makes commercial sense.
• Simpler treatment for many domestic loans. For domestic loans entered into on or after 1 January 2025, where neither party is in the business of borrowing and lending, the tax authority will not make a transfer pricing adjustment.
• Interest-free cross-border loans need support. They are treated as arm's length only where there is reliable evidence that independent parties would lend on the same terms.
• Every loan is reviewed every year. The annual review clearly covers all loans, not only long-term ones, and the outcome is recorded in the documentation.

Section 4 has four questions to help you check your own loans.

1. Why documentation is worth doing well

Transfer pricing documentation is your story: how your related party prices were set and why they are arm's length. Having it ready means you lead the conversation with the tax authority.

It keeps you compliant, year after year

The requirement applies to every Year of Assessment, and a fine of up to S$10,000 can apply for each year it is missed. Staying on top of it each year keeps things simple and avoids surprises.

It lets you tell your story first

This is where the real value lies. When a company has no explanation ready, the tax authority runs its own analysis and puts forward what it considers the arm's length price. When your documentation is in place, the discussion starts from your facts, your method and your comparable companies. That is a far more comfortable place to be.

Questions worth asking

• If the tax authority asked tomorrow how your related party prices were set, what would you share?
• Who in your team knows the story behind those prices, and is it written down?
• Are all your earlier years covered?

2. Ready when you file, refreshed every year

Documentation should be prepared by the time the tax return is filed. You do not submit it with the return. If the tax authority asks for it, you have 30 days to share it, which is easy when it is already done.

A company prepares documentation if its gross revenue for the basis period exceeds S$10 million, or if it was required to prepare it for the previous basis period. Some exemptions are available, so it is worth checking whether one applies to you.

Prepared when you lodge, kept ready for five years

Transfer pricing documentation is kept for five years, and a review or audit of your tax return or your transfer pricing can come at any point in that time. This is why documentation needs to be contemporaneous: prepared by the time you lodge the tax return, while the facts are fresh and the people who know them are close at hand, and then kept ready.

If a question arrives three or four years later, you simply share what you already have. That is a comfortable position to be in, whether the review is about your tax return in general or your transfer pricing in particular.

Annual updates are mandatory, and they can be simple

Documentation is updated every year. The encouraging part is that an update does not always mean starting again.

• Simplified update. If your company meets certain conditions, you can rely on documentation from an earlier year, supported by a dated declaration.
• Full update. If the conditions are not met, a full update is prepared for that year.

The conditions look at whether anything significant has changed in your business or in your related party transactions. The 8th Edition of the guidelines asks for the declaration to be in place by the time the tax return is filed, so that it counts as your update for the year.

Would your business qualify for a simplified update?

Take Company A, which distributes Product X to Company B, a related party. Company A prepared transfer pricing documentation for Year of Assessment 2023, including a benchmarking study. Based on that study, Company A is remunerated with an operating margin of 3%.

For Years of Assessment 2024 and 2025, Company A can use the documentation prepared for 2023, including the financial analysis, as long as it still qualifies. Now consider three everyday changes:

• What happens if, in 2024 and 2025, Company A distributes Product X and Product Y?
• What happens if Company A distributes to Company B and Company C?
• What happens if Company A's operating margin is outside the benchmarked range for the financial years ended 2024 and 2025?

Growth and change are good things for a business. They can also mean a simplified update is no longer the right fit. If any of these sounds like your company, we would be happy to talk it through with you.

3. Six common myths, cleared up

Myth 1: "Head office has a Master File, so we are covered"

A Master File is a great starting point. It describes the group, and Singapore also looks for documentation that explains the Singapore company's own transactions, functions and pricing. Localising the group documentation for Singapore completes the picture, and it often builds on work head office has already done.

Myth 2: "I only update my report every three years"

The update is in fact every year. The good news is that it can be a simplified update when the conditions are met, and a full update only when they are not.

Myth 3: "We only need it if the tax authority asks"

Documentation is prepared by the time you file your tax return. Having it ready means a request is easy to answer within the 30 days allowed.

Myth 4: "The fine is small, so documentation can wait"

The fine can apply for every Year of Assessment. More importantly, documentation is what lets you explain your pricing yourself, so the tax authority does not need to work out the price for you.

Myth 5: "It is only an intercompany loan, so it does not need documentation"

Loans deserve attention too. If your related party loans exceed S$15 million, consider whether documentation is required. A quick yearly review of every loan keeps things in order.

Myth 6: "We paid withholding tax, so the deduction is safe"

Withholding tax and deductibility are separate questions. A payment is deductible when it is arm's length, and documentation is how you show that.

Have you come across any of these? You are in good company, and each one is easy to put right.

4. Related party loans: four helpful questions

Intercompany loans are receiving more attention under the 8th Edition of the guidelines. Four questions help you see where you stand.

• Is it debt or equity? Being clear on how the funding is characterised, and that it makes commercial sense, gives you a solid foundation.
• Do your related party loans exceed S$15 million? If so, consider whether transfer pricing documentation is required.
• Is any cross-border loan interest-free? The tax authority looks for evidence that independent parties would lend on the same terms, so it helps to have your reasoning ready.
• When were the terms last reviewed? A yearly review of every loan, noted in your documentation, keeps you up to date.

The treatment can differ depending on whether the Singapore company is the lender or the borrower. We are always glad to help you work out where your loans stand.

5. Arrangements that make commercial sense

In almost all cases, the tax authority respects related party arrangements as they are structured. It sets a transaction aside only in exceptional circumstances, where the arrangement lacks commercial rationality and an arm's length price cannot be reliably determined.

For example, a royalty paid for know-how that is freely available to the public may not be accepted, because an independent company would not pay for it.

Questions worth asking

• Can you describe, in plain terms, what your company receives for each royalty, service fee or interest payment it makes to a related party?
• Would an independent company be happy to agree to the same arrangement?

If the answer to both is yes, you are in a strong position.

6. Related parties can include individuals

In July 2026, the Inland Revenue Authority of Singapore updated its guidance on the Related Party Transactions Form. It clarified that a related party may include an individual shareholder or director, where the control relationship set out in Singapore tax legislation exists.

This is a clarification, not a new requirement. It is simply a good moment to check that your list of related parties is complete. Privately owned groups, family-controlled businesses and founder-led organisations will find it most relevant. The form applies only where related party transactions exceed S$15 million, so many smaller businesses will see little change.

Questions worth asking

• Does your company have loans or balances with shareholders or directors?
• Were those balances included when you last checked whether the form applies to you?
• Does your list of related parties look beyond the corporate structure chart?

Frequently asked questions

We would love to hear your questions

Transfer Pricing Solutions Asia is a specialist transfer pricing firm with offices in Singapore, Malaysia and Australia. Our directors lead every engagement personally, and we enjoy making transfer pricing clear and manageable.

If anything in this article raised a question about your own business, we would be glad to hear from you. Contact Adriana Calderon at adriana@transferpricingsolutions.asia or +65 6407 1126 , or visit www.transferpricingsolutions.asia .

This article is for general information and educational purposes only. The rules and their application may vary with the specific facts involved, and it is not a substitute for professional advice.

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