Due to increased tax authority scrutiny around the world, transfer pricing has become one of the riskiest areas for multinational corporations from both a compliance and tax planning perspective. Amazon, AOL, Adobe, Hewlett-Packard, Microsoft, and other multinationals have all made headlines in recent years because of transfer-pricing disputes over potential adjustments to income ranging from tens of millions to upward of a billion dollars. However, if you think transfer pricing affects only big companies, think again. Size is immaterial. The only condition that triggers transfer pricing is the existence of multiple facilities in more than one taxing jurisdiction.
Unfortunately for the small guy, whilst the Base Erosion Profit Shifting (“BEPS”) project refers to Small and Mid-size Entities (SMEs) and Multi-National Entities (MNEs) it seldom differentiates the rules between them. Despite the fact that cross-border structures typically employed by SMEs do not have the same characteristics of the ones by large MNEs, the same BEPS tax rules and scrutiny apply for both SMEs and MNEs. As Singapore adopts the lengthy and complex BEPS recommendations into our tax legislation, the impact of many changes being suggested will be felt in increased governance, compliance costs and in some cases taxing authority audits.
This seminar discusses how SMEs can best manage the new transfer pricing landscape on a smarter basis. Singapore SMEs need to play their cards right and ensure that their global tax footprint is commensurate with group operations and value creation across tax jurisdictions. Design will be important and any planning will need improved focus on substance.
- The transfer pricing life cycle and what it means for SMEs
- Transfer pricing topics of interest for SMEs (Case Studies)
- Best practices for charging management fees to related parties
- Managing intellectual property
- A practical toolkit for SMEs to:
- Build your own transfer pricing landscape
- Assess your transfer pricing risk
- Plan and prioritize documentation efforts to meeting compliance deadlines whilst managing costs
- Understand “safe harbor” and other exemptions (from Singapore transfer pricing documentations) available for SMEs