Prapti Acharya FCA, Britain, India, FCA,
Shanker Iyer & Limited, Certified Public Accountant, Singapore
Singapore is well connected to major business destinations for people all over the world, and its competitive tax rate makes it easy to set up an entity in Singapore, a popular destination in Singapore, to set up a business headquarters to cater to downstream investments in Europe and the Asia-Pacific region. Where it may not appear, it is mentioned here that according to the latest statistics data 1, Singapore has always been ranked as the second channel for foreign direct investment to enter India.
In recent months, Singapore has been at the forefront of the most international discussions on its tax legislation. At the recent G20 summit, world leaders promised that they would take action against "tax havens" and other non-cooperation. Secondly, the OECD releases a gray list of countries that have not been significantly implemented2 in the agreed standards for tax purposes. Singapore is such a grey list of the Organization for Economic Cooperation and Development (OECD). After an "Endeavour" also has its name removed from the gray list, Singapore has agreed to comply with the OECD standard for information exchange. Substantive measures have begun to comply with these OECD standards.
1, information exchange
Due to the escalating international pressure, Singapore has relaxed its laws on bank secrecy obligations in Singapore, enabling cooperation between countries to exchange information on cross-border fiscal revenue and capital and avoid fiscal tax evasion. Singapore recently proposed to introduce legislation and exchange information in overseas areas in its domestic tax laws. This bill is an important step to determine the steps of the world economy. Singapore is taking a substantive OECD off the gray list and thinks it is not a tax haven. In fact, it is interesting to note that in the OECD's gray list, Singapore is classified as "other financial centers" rather than "tax havens" in the main category. At present, Singapore keeps secrecy as a legal bank and trust company, because it has gained popularity as an important financial center. These laws are almost impossible for Pierce authorities to seek overseas information about them when their income information is asymmetric and information/assets are located in Singapore.
The income tax law will be amended to allow Singapore tax authorities ('') to apply for the management and implementation of IRA information held by banks or trust companies for the purpose or for the jurisdiction of domestic tax laws, regardless of whether this matter involves Singapore tax. It is meditation to prove Singapore's insistence on the standard. At present, there is no treaty in Singapore that is the same as the United States and will initiate discussions. It is said that so far, the United States has no longer signed a tax treaty with Singapore because of its information exchange.
Although agreeing to this globally accepted standard, the Singapore authorities also imagine that each law can be used and abused with the same intensity. Therefore, in order to protect the account holders and trust companies of banks with this interest, this proposed legal provision will limit its scope, and the fishing authorities will not accept information related to Singapore. Therefore, the proposed legally clear information exchange will be close to the Singapore tax authorities under the jurisdiction of foreign countries, and further make it seem that all the people who need to make orders through the High Court apply relationships to the possessors of information.
The overseas jurisdiction of legislation to request information should be specific details, including taxpayers and the goals pursued by the essence of information. In addition, the same should also include the relevant information of information, on the grounds that it is believed that this information is pursued by all means under the jurisdiction of a person in Singapore and the authorities, and information can be obtained in his own territory, including seeking information directly from whom the information related to the person is sought.
2. Transfer pricing
Multinational enterprises operate in the cooperation of tax jurisdiction in the market, rather than tax competition. It is logical to insist on standard information exchange and similar measures to transfer pricing between international cooperative countries, and the next step is to quantify interest income and property in their respective jurisdictions. Transfer pricing laws and regulations have always been regarded as a fair measure in their domestic laws, and the state recognizes that their legislation is purely to protect their income base. Advanced pricing agreements, usually called APA, also play an important role in promoting international cooperation and providing convenience and certainty for multinational enterprises to plan their investment in transnational operations.
On the way home, in 2006, the IRA has issued guidelines on transfer pricing, and for the first time, the specific method of transfer pricing has been worked out. The preface circle said that "the guiding principles and the length of documents required on the arm are applicable to all trading activities, local and multinational taxpayers, and Singapore and its related parties". The mainstream is round; Ira obviously agrees with the principle and method described in the length of its arm. The circular approach follows the transfer pricing adopted by the OECD.
In a circular state, taxpayers know their business and environment are the best. Such intimate knowledge business environment and various real economic relations related to their business operations will enable taxpayers to perform a good robust and comprehensive transfer pricing analysis in the best position. In the further state of the circle, ira only provides a guide, and it does not lay rigid rules, so taxpayers are free to take any prescribed method for transfer pricing, including a revised version of the same thing. The most reliable results produced by this method should be selected in consideration of the accuracy and degree adjustment of the ready-made data of quality.
The circle clearly shows that Japan has the responsibility to ensure that taxpayers can show that the price keeps a certain distance. The above theory issued a guideline that ira is increasingly concerned about outside Singapore and will transfer pricing. ira deliberately provides guidance on the requirements of the principle of one-arm taxpayer relationship transactions, because the local tax authorities in other jurisdictions are part of a larger enterprise group that should abide by the national transfer pricing regulations on enterprise groups.
Circular statement, taxpayers do not need to prepare detailed transfer pricing documents. In the cycle described in IRA, entities should evaluate the costs and benefits from preparing a detailed document and transfer pricing, and should not go to the width and maintenance of the cost transfer pricing document to prepare more benefits than to derive from it.
In recent times, people have focused more and more on transfer pricing in Singapore. In 2008, IRAs issued three new letters on transfer pricing. Short details are like letters.
(I) of the transfer pricing consultation cycle:
In a certain case of high value, through related party transactions, in a consultation process, IRAs will assess the taxpayer's transfer pricing risk, review its transfer pricing documents and provide suggestions for managing risks. IRAs will carry out this process and issue questionnaires asking about the company's main activities, the organizational structure and related transactions. Based on the questionnaire, IRAs will be evaluated. If the transfer pricing consulting field passes this visit to the American IRAs, the tax business premises will be required to collect more information.
(II) Supplementary Notice (pricing arrangement of APA under administrative guidance):
The purpose of ira through this notice is to give business opportunities to reach an agreement on their future international behavior with tax authorities and relevant parties, and to provide explanations on the application of procedures, so that individual retirement accounts can consider the requirements applicable to "positive" years under the procedural law.
(3) Supplementing related party loans and related party services in the e-tax transfer pricing guide:
(1) Loans from related parties
At present, IRAs are tax-free as interest-free loans in mutual agreement. In the case of a stakeholder loan, the interest expense of a free retirement account will usually veto any loan taken by the lender's interest-free loan.
The supplementary notice of the United States, ira is pleasant, allowing the current position to continue (as mentioned above) to get a two-year transition period, that is, from 1 month 1 day in 2009 to 20 10/year on December 31st, so that enterprises have enough time to modify their loan arrangements on the basis of arm's length.
(b) related party services
For regular services: ira expects xml namespace prefix: <; ? = = "Tanks meet ns merger: the office is picturesque > Singapore receives regular 5% services such as the edge of basic entities.
Service contract cost pool: If an enterprise group enters into the nature of the pooling contract routine and has the same demand for the frequently used group, such service can (under certain conditions) bear the profit space on the basis that the group does not have any proportional cost.
Service for the company: ira expects to earn an arm's length in an unconventional way.
It is proved that the above issuance is circular, and the interest-free cross-border loan from 1 month 1 day is 20 1 1 year, and the unconventional related party service needs to be carried out at an arm's length.
The Income Tax (Amendment) Bill, first introduced in 2009, proposed the transfer pricing legislation income tax law in Singapore. At present, this bill is very basic, therefore, it depends to a great extent on how to implement the same thing through the tax authorities in Singapore. Therefore, the transactions reached between all relevant parties are expected to be at arm's length at home and abroad, that is, the pricing should be comparable to similar transactions and unrelated parties.
Putting too much focus on IRAs pricing the transfer of the regime, then it is wise to maintain appropriate documents to show that the price is at one arm's length for all related transactions.
1。 I went to Singapore for an overview of taxation.
Tax revenue is the basis of Singapore's territory. It takes effect from, but it is generally evaluated that the corporate tax rate in 20 10 has been reduced from 18%, and some tax exemptions have been, until the income of S 300,000 dollars (that is, 75% of the expenses are exempted from S $ 10,000 and 50%). Preferential tax policies can promote the development of certain industries in Singapore. If the requirements of tax incentives are approved, the tax incentives that the company will enjoy and the income it will give during the qualifying period will be tax-free or taxed at a lower rate than the corporate tax rate, which is now 17%.
Capital gains or losses are not taxable or deductible in Singapore. However, after a series of similar transactions were conducted, the Tax Authority of Singapore (ira) may think that these transactions were evaluated with the profit motive and income as profitable transactions.
Singapore has no legislation or thin capital to control the rules of foreign companies. Companies in Singapore can have an overseas subsidiary to receive tax-free income. This may be accumulated by subsidiaries and not subject to Singapore tax unless the income is remitted to Singapore.
Tax residence of a company 3. 1
Singapore's residential tax avoidance, the company's actual location to determine the company's board meeting and exercise to maintain their de facto control.
Singapore companies are responsible for Singapore-sourced income and foreign-sourced income from Singapore resident tax, but only to some extent, such foreign-sourced income is remitted to Singapore.
Singapore's purchasing income covers passive income (dividends, interest, distribution from unit trust funds) in Singapore and more active trading income, unless the company can prove that it is a non-Singapore source.
Foreign-sourced income 3.2
A resident company in Singapore must receive or remit its foreign-source tax revenue (except) in Singapore. The receipt of such income in Singapore is regarded as: if it is remitted, transmitted or brought into Singapore, it will be applied to or towards the satisfaction of any debt on trade or business, or it will be applied to the purchase of any movable property in Singapore.
Designated foreign exchange income (such as profits and dividends of foreign-sourced foreign branches and foreign-sourced service income) received by Singapore resident companies is tax-free. The following conditions are met: the income received in this year is in Singapore, and the relevant foreign jurisdictions with the title (highest) corporate tax rate are at least 15%;
B) The designated foreign exchange income must be subject to tax jurisdiction in Singapore (whether paid or payable abroad).
This situation will not be satisfied if:
Foreign income is not subject to foreign jurisdiction. If the tax is due to a formal tax incentive; I went to Singapore before the foreign exchange income paid income tax was moved or invested in another foreign jurisdiction, and the income was repatriated without any income tax.
3) ira is satisfactory, and tax exemption helps companies in Singapore.
To help enterprises tide over the current economic crisis, the scope of foreign-sourced income has been extended until the tax-free plan covers all foreign-sourced income and the current conditions are lifted to meet the tax exemption when remitted to Singapore. Therefore, the company will remit money in Singapore on or before the foreign-sourced remittance or withholding of Singapore's tax income in 2009 1 month 2 1 day, and remit it to 22 to 20/year 1 month 2/year 2009.
330 profit distribution
Singapore is under a one-tier system, and the income tax expenses incurred by Singapore companies (whether resident or non-resident) will be the final Singapore tax for Singapore companies and their shareholders (whether resident or non-resident).
3.4 Withholding income tax
Under the regulations of Singapore, the corporate income tax law has the obligation to refuse certain tax payments or think that Singapore pays the borrowing fee. These payments include services such as interest, license fees, royalties, management fees (except reimbursement of pure expenses), consulting and technical service fees; In Singapore, directors' fees and remuneration and rental of equipment.
There is a double tax treaty with Singapore, and the tax treaty will apply for a reduction or exemption of withholding income tax from Singapore.
3.5 Double tax relief system
Singapore resident companies can rely on Singapore's network of tax concessions.
It is impossible to exempt foreign exchange income there, because in Singapore, foreign exchange income is received from a country, Singapore has a double tax treaty, or the country on the list, Singapore grants are unilaterally embossed, and foreign taxes suffer from the restrictions that will be allowed as claim income, and they will be brought into Singapore as the biggest relief for the economic income that Singapore tax originally suffered, and at the same time, they will commit double taxes for themselves.
The author can find shanker@iyerpractice.com and prapti.acharya@iyerpractice.com.
The information contained in this document is for general reference only. Although all have taken reasonable care to prepare this document, Shankeriyer &; The company does not assume any liability for compensation, read the contents of the measures and consult us about all relevant factors.
In fact, sheet-April 1 India's foreign direct investment in 2009
2 authority, it is said that the internationally recognized "Organization for Economic Cooperation and Development (OECD) standard has been greatly implemented for information exchange, if it has signed a minimum of 12 tax information exchange agreement with many other legal jurisdictions.