TaxSavvySG

Routine support services markup

Can we charge our group a cost-plus 5% for back-office services?

The situation

IRAS accepts a cost-plus markup for certain routine support services, subject to conditions.

The law

  • Secs 34D and 34F, Income Tax Act 1947: Related party transactions at arm's length; transfer pricing documentation when thresholds are met

What it means for you

Check the list of qualifying services and the current markup in IRAS guidelines. Non-routine services need full benchmarking. The markup and service list are in IRAS's TP guidelines. Check the current version.

What to do

  1. List services.
  2. Check the routine list.
  3. Apply markup.
  4. Document.

We can do this for youTransfer pricing documentation: SGD 5,000

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