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Key Takeaways from the guidelines issued by the Singaporean Tax Authorities

Atishay Jain 
on 12 April 2021


1) Singapore is the preferred destination for the MNC's / MNE groups for setting up hub or HQs for APAC regions. The said guidelines provide for the determination of remuneration for such hubs/ HQs on arm's length basis;

2) Services provided by such hubs/HQs are critical to the operations carried on by the subsidiaries or fellow AE's. Accordingly, while determining the Arms length remuneration due consideration should be given to the HQ's/ Hub's contribution to the value creation. Such contribution should not be merely based on Functions, Assets and Risk (FAR) carried, but also on the economic significance of those functions performed;

Key Takeaways from the guidelines issued by the Singaporean Tax Authorities

3) The Guidelines discuss 4 types of centralized activities undertaken by HQs

(i) Principal in distribution, manufacturing or research and development arrangements;

(ii) Activities relating to core business processes;

(iii) Activities relating to administrative, technical, financial, commercial, management, coordination and control functions; and

(iv) Shareholder activities;


For each type of transaction, an indicative FAR analysis, as well as appropriate TP methodology, has been prescribed.


Hope you will find the above useful!

The IRAS e-Tax Guide has been enclosed below

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Category Income Tax
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