Singapore: Administrative concession for prior transfer pricing treatment of share-based compensation costs

The Inland Revenue Authority of Singapore (IRAS) announced a one-time administrative concession concerning the transfer pricing treatment of employee share-based compensation (SBC) costs for FY2022-FY2024.

Earlier in 2026, IRAS updated its transfer pricing guidance regarding SBC costs under cost-plus arrangements. The guidance generally requires SBC costs attributable to employees of a Singapore entity to be considered in determining the transfer pricing cost base and associated service charges.

Under the administrative concession, taxpayers that may not have applied this treatment in previous years may revisit their transfer pricing positions for FY2022-FY2024 and make voluntary adjustments for those years, with relief from transfer pricing surcharges available when the relevant conditions and deadlines are met.

The concession also allows taxpayers to revisit transfer pricing cost-plus calculations involving SBC for FY2022-FY2024 using the approach permitted by IRAS for periods after January 1, 2025, even though that approach generally would not be available under the standard application of the transfer pricing guidance to financial years before January 1, 2025.
 

For more information, contact a KPMG tax professional:

Mohit Agarwal | mohitagarwal18@kpmg.com