Regulators have accused multinationals such as Apple and Starbucks of taking advantage of transfer pricing to shift their profits from units in high-tax jurisdictions to units in countries with lower tax rates, such as Singapore, to reduce their tax bills.

The Organisation for Economic Co-operation and Development (OECD) has even launched an action plan to curtail firms moving funds abroad to avoid high taxes. The Inland Revenue Authority of Singapore (IRAS) has responded to that initiative by issuing its first update on transfer pricing rules since the guidelines were issued in 2006.

IRAS’ update, which was uploaded on Monday to its e-Tax Guide, makes it one of the first tax regulators in the world to adopt the transfer pricing documentation format advocated by OECD. It is certainly a step in the right direction, said PwC Singapore transfer pricing leader Nicole Fung. She said: “The guidelines will help Singapore enterprises face an increasingly transparent global tax world. –