What are MAPs?
MAPs are the Mutual Agreement Procedures present in Singapore’s Avoidance of Double Taxation Agreements (“DTAs”). Under the MAP process, Singapore taxpayers can apply to IRAS to enter into discussions with Singapore’s tax treaty partners to eliminate any double taxation arising from transfer pricing adjustments.
IRAS will not entertain requests for elimination of double taxation from transfer pricing adjustments, outside of the MAP process.
If the taxpayer wishes to apply for MAP, the request must comply with the time limit stated in the relevant DTA. For example, many DTAs state that a MAP application must be made within 3 years from the first notification of the action giving rise to taxation not in accordance with the DTA.
More details may be found in Section 5 of the IRAS Circular on Transfer Pricing Guidelines (533KB).
What are APAs?
APAs refer to Advance Pricing Arrangements, which are agreements made in advance regarding the pricing of a taxpayer’s related party transactions, for a specific period of time.
APAs can be agreements between:
- IRAS and the taxpayer (unilateral APA);
- Agreements between IRAS and a tax treaty partner on the transfer pricing between entities in their respective countries (bilateral APA); or
- Agreements between IRAS and 2 or more tax treaty partners on the transfer pricing between entities in their respective countries (multilateral APA).
The level of certainty in a unilateral APA is lower than a bilateral or multilateral APA, since a unilateral APA is agreed between IRAS and the taxpayer, and not with the tax authority of the other country. If Singapore does not have a DTA with the other country, the unilateral APA comes under the framework of Singapore’s Advance Ruling System (191KB).
Administrative Guidance for APAs
The APA process is usually a resource intensive process for both the taxpayer and IRAS. It usually starts with a pre-filing meeting initiated by the taxpayer. A minimum set of information (as listed in Annex A of the IRAS Supplementary Circular on Supplementary Administrative Guidance on Advance Pricing Arrangements (70KB)) should be submitted to IRAS at least 1 month before the 1st pre-filing meeting.
Where IRAS agrees that the taxpayer should submit the formal APA application, the formal submission should be submitted at least 6 months before the start of the proposed APA period. If it is a bilateral or multilateral APA, the formal submission should be submitted to all the tax authorities concerned. The formal APA submission should include all the key information listed in paragraph 18.104.22.168 in the IRAS Circular on Transfer Pricing Guidelines (533KB).
Upon acceptance of the formal APA application, IRAS will review the submission and, where it is a bilateral or multilateral APA application, IRAS will commence discussions with the relevant tax treaty partners. The APA process typically requires additional information from the taxpayer. Any additional information submitted should be provided simultaneously to all tax authorities involved.
IRAS will keep the taxpayer informed of the completion of the APA review and negotiation process.
The diagram below shows the submission timeline of an APA application that should be observed by the taxpayer.
Please contact: firstname.lastname@example.org if you wish to submit an application.