Singapore officially adopts ALP
The Singapore government has passed a law that requires taxpayers to comply with the arm’s-length principle.
The Income Tax (Amendment) Act 2009 introduces the principle to taxpayers for the first time.
The new provision, section 34D, gives the tax authority the power to adjust the taxable income of an entity if a transaction does not meet the arm’s-length standard.
Before the new law was passed, the principle had been informally endorsed by the Inland Revenue Authority of Singapore and in Singapore’s tax treaties.
Taxpayers should take steps to ensure they have maintained correct documentation in the event of any potential dispute.