The Inland Revenue Authority of Singapore (“IRAS”) has issued transfer pricing guidelines for companies affected by the COVID-19 pandemic, which includes guidance on documentation requirements, term-testing for related party transactions and Advance Pricing Arrangements (“APA”).

Continue Reading Singapore’s Transfer Pricing Guidelines for COVID-Affected Businesses

COVID-19 has sparked a seismic change in the workplace as many companies have found that working from home (“WFH”) has not diminished employee productivity and that employees prefer its greater flexibility. Given that—and the potential for saving on overhead costs—many companies have announced plans to adopt long-term WFH policies and close or realign office space. The OECD and several countries including the US, UK, Ireland, and Australia have issued guidance that excepts employees temporarily dislocated outside their employer’s country from creating unintended permanent establishments (“PE”)—but long-term WFH employees are not similarly excepted. The US, in particular, has thus far only officially extended PE protection for temporary dislocations of up to 60 calendar days that begin within the emergency period of February 1, 2020 through April 1, 2020.

While many employees that WFH do so from the same country as their employer, that is not always true, and so companies would be wise to perform their due diligence. To that end, this post analyzes some PE issues that a company should consider before it adopts a long-term WFH policy.


Continue Reading Work-From-Home Policies in the Post-COVID Era

Multinational Enterprises (“MNE”) that are looking to mitigate their exposure to market changes provoked by crisis may find themselves considering the termination or suspension of intercompany agreements with non-performing parties. Terminating an existing intercompany agreement can very well be a key step that an MNE undertakes to protect its business; however, MNEs should also be aware that terminating arrangements could lead to unintended transfer pricing and tax consequences and may ultimately impact the structure of the group.
Continue Reading Termination of Intragroup Agreements in Crisis Times

COVID-19 has placed unforeseen stress on the distribution structures of Multinational Enterprises (“MNE”) due to catastrophic losses and costs from supply chain interruptions and plummeting demand. Existing intercompany agreements most likely do not cover the allocation of catastrophic costs or losses and several questions may need to be addressed. For example, should catastrophic costs be shared among group members, and if the answer is yes, then how?

Continue Reading Allocation of Catastrophic Costs

COVID-19 has made force majeure a hot topic in transfer pricing. The idea is that the pandemic was an unexpected development of such power, like a natural disaster, that transfer pricing agreements can be changed to reflect the changed economics of a changed world.

But is there any case authority to support this approach? In fact there is, from one of the largest US transfer pricing cases of the 1990s.


Continue Reading “Mutual Dependence”: Authority for Force Majeure in Transfer Pricing