New Indicative Margins for Related-Party Loans in Singapore

February 10, 2023

The Internal Revenue Authority of Singapore (IRAS) updated its Transfer Pricing guidance on January 3, 2023, including the updated guidance on indicative margins for related party loans. For the period January 1 to December 31, 2023, the indicative margin is +230 bps (basis point) or 2.30%.

The indicative margins that taxpayers may apply on each related party loan not exceeding S$15 million are shown below. 

Related party loan not exceeding 15 million Singapore dollars obtained or provided during the period Indicative Margin
January 1, 2017, to December 31, 2017 + 250 bps (2.50%) 
January 1, 2018, to December 31, 2018 + 175 bps (1.75%) 
January 1, 2019, to December 31, 2019 + 175 bps (1.75%) 
January 1, 2020, to December 31, 2020 + 200 bps (2.00%) 
January 1, 2021, to December 31, 2021 + 275 bps (2.75%) 

Indicative Margin Features

The indicative margin is not mandatory but optional. It is updated at the beginning of each calendar year.

It works as an alternative to a detailed Transfer Pricing analysis to comply with the Arm’s Length Principle for its related party loans. 


The indicative margin is added to a reference interest rate, such as the Singapore Interbank Offered Rate (SIBOR) for adjustable-rate loans or an SGD/USD interest rate SWAP for fixed-rate loans. The limit of SGD 15 million is based on the loan granted, not the loan used.

This rate is intended to approximate a market interest rate. If taxpayers choose not to apply the indicative margin or the latter does not apply to them, they must apply an interest rate aligned with the Arm’s Length Principle. 


Source: RegFollower 02/10/23