The Transfer Pricing Audit: Risk Factors That May Trigger an Audit

Par Robert Robillard - 6 novembre 2014

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In a recently released document, the Inland Revenue Authority of Singapore offered to taxpayers around the globe an interesting glimpse into the high-risk factors that may trigger a transfer pricing audit.

« 7.5 Examples of circumstances where transfer pricing risks may be considered high are:(a) Use of transfer pricing strategies that are intended to shift profits to other related parties subject to a more favourable tax treatment;
(b) Transactions with cross-border related parties that are of large value relative to the other transactions of the taxpayer;
(c) Transactions with related parties in low tax jurisdictions;
(d) Recurring losses or large swings in operating results which may be unusual given the functions and assets of the taxpayer and the risks it assumed;
(e) Operating results that are not in line with industry norms;
(f) Use of intellectual property, proprietary knowledge or other intangibles in the business;
(g) Transactions involving R&D or marketing activities which could lead to development or enhancement of intangibles; and
(h) Indications (examples, through engagement with tax authorities, country’s audit focus, etc.) that the transactions are likely to be subject to transfer pricing audit by tax authorities. »

See more on Singapore transfer pricing policies on RBRT’s transfer pricing around the world webpage available here.

Robert Robillard, CPA, CGA, MBA, M.Sc. Econ.
Transfer Pricing Chief Economist, RBRT Inc.
514-742-8086; robert.robillard « at » localhost
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RBRT Inc. is all about transfer pricing. We specialize in transfer pricing. Our services include transfer pricing documentation, transfer pricing dispute resolution, advanced pricing agreement (APA), value chain management and TP planning, transfer pricing training. The information in this blog post is general information only. Data and information come from sources believed to be reliable but complete accuracy cannot be guaranteed. RBRT Inc. and the author are not responsible or liable for any error, omission or inaccuracy in such information. Readers should seek independent tax advice and tax counsel from RBRT Inc. as required.