The most reliable way to avoid transfer pricing disputes is to price related-party transactions at arm's length from the outset and to be able to prove it. Disputes typically arise when pricing looks non-commercial or when a company cannot support its position with contemporaneous analysis.
Good practice starts with maintaining proper Transfer Pricing Documentation where you meet the thresholds, refreshed each year, that explains your business, your related-party dealings, the method chosen and the benchmarking behind your pricing. Consistency matters too – your intercompany agreements, invoices and actual conduct should match what your documentation describes.
For significant or complex transactions, or where certainty is important, you can approach IRAS proactively through an Advance Pricing Arrangement (APA), which agrees an acceptable transfer pricing method in advance. Where cross-border double taxation arises from another country's adjustment, the Mutual Agreement Procedure (MAP) under Singapore's tax treaties can help resolve it.
Apexia can help you set robust transfer pricing policies, keep your documentation current, and engage IRAS through APAs where appropriate to minimise the risk of a dispute.