These indicative margins are applicable only to loans that use RFRs such as:

• Singapore Overnight Rate Average (SORA)
  
• Secured Overnight Financing Rate (SOFR)
  
• Sterling Overnight Index Average (SONIA)

From 2022, IRAS no longer publishes indicative margins for Interbank Offered Rates (IBORs) like SIBOR or LIBOR. Table A of the guidance reflects margins only up to 2021. Any loans referencing IBORs after 2022 must follow the IRAS Transfer Pricing Guidelines, aligning with global IBOR reform.

If a taxpayer provides a S$10 million floating rate loan on 1 March 2026 and references the 3-Month SORA as the base rate, the interest rate can be determined as: 3-Month SORA + 1.80% (IRAS indicative margin)

All legacy related party loans referencing IBORs must transition to RFRs. When doing so, the IRAS indicative margin does not apply. Instead, taxpayers should follow the official guidance from relevant authorities such as:

• The Singapore Steering Committee for SOR & SIBOR Transition to SORA
  
• The Association of Banks in Singapore
  
• The Monetary Authority of Singapore

IRAS’ indicative margin is not mandatory. Taxpayers may choose to conduct a detailed transfer pricing analysis to support their arm’s length interest rates. Where applicable, contemporaneous documentation under Section 34F of the Income Tax Act 1947 must be prepared to support the method and rate chosen.