TP Ticker – June 2019
Expansion of Country Profiles
On 18 June 2019, the OECD published three new transfer pricing country profiles. The transfer pricing country profiles are prepared by surveying the tax administrations of the respective countries and provide an overview about the current state of transfer pricing legislation and practices in the covered countries. With the three new reports – for Chile, Finland, and Italy – the number of profiles is now at 55.
The OECD’s transfer pricing country profiles can be found on the website of the OECD here: https://www.oecd.org/tax/transfer-pricing/transfer-pricing-country-profiles.htm
Singapore Guidelines on Commodity TP
On 24 May 2019, the Inland Revenue Authority of Singapore (“IRAS”) released the Transfer Pricing Guidelines Special Topic – Commodity Marketing and Trading Activities (“Commodity Trading Guidelines”). These guidelines were developed in cooperation with Enterprise Singapore and provide an overview about the commodity trading industry in general as well as with a focus on functions and risks from a transfer pricing (“TP”) perspective. They especially include an extensive overview about activities that may be performed as part of a trading business, such as identification of mismatches in supply and demand, counter-party education and cooperation, vessel management, and legal documentation and insurance. Furthermore, business risks that may occur in relation to such activities – like for example excess/shortfall production, customer non-performance, and demurrage – are detailed. The guidelines furthermore discuss how the individual TP methods may be applied and what the taxpayer should consider when documenting the trading transactions.
The Commodity Trading Guidelines are a further step in Singapore’s ongoing efforts to develop the TP capabilities of its tax administration and providing local taxpayers easily understandable guidance. In our perspective, the guidelines are not only helpful for trading enterprises in Singapore, but also in other jurisdictions, such as Switzerland or the United Kingdom. They are easily accessible to non-experts and may even be helpful for TP economists to structure their analyses in a manner that is readily understandable for tax examiners without a deeper understanding of the industry.
The Commodity Trading Guidelines are available on the website of the IRAS here: https://www.iras.gov.sg/media/docs/default-source/e-tax/etaxguide_cit_commodity-activities.pdf?sfvrsn=7488c4e0_0