Transfer Pricing Benchmarking and Analysis

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This analysis involves comparing similar uncontrolled transactions (i.e. an independent third party) to which the controlled transactions (i.e. the tested transaction) can be benchmarked against. The comparability analysis and benchmarking analysis will form the basis to arrive at a transfer pricing that complies with the arm’s length principle. It thus plays a significant role in substantiating the transfer pricing positions and defend against any challenges from tax authorities.

The Inland Revenue Authority of Singapore (IRAS) recommends that Singapore taxpayers adopt the following three-step approach to apply the arm’s length principle:

FOZL has access to a full licence third-party database, providing reliable benchmarks to determine the arm’s length range for each method. Internationally accepted transfer pricing methodologies include comparable uncontrolled price (CUP) method, resale price method (RPM), cost plus method (CPM), transactional net margin method (TNMM), or profit split method (PSM). We can assist you in fulfilling the transfer pricing compliance requirements.