Singapore: Cost plus mark-up basis of assessment | KPMG | GLOBAL
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Singapore: Cost plus mark-up basis of assessment for service companies

Singapore: Cost plus mark-up basis of assessment

The Inland Revenue Authority of Singapore clarified the scope of the “cost plus mark-up” basis of assessment for service companies, and provided rules for companies transitioning from the cost plus mark-up to the “normal trading company” basis of assessment.


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The tax authority’s position is that the cost plus mark-up basis is strictly for service companies providing routine support services (as listed in an annex to the transfer pricing guidelines) to related parties only. When the cost plus mark-up basis is adopted, the income is computed based on a 5% mark-up of total expenditures without any further adjustments.

Accordingly, certain companies must transition to the normal trading company basis rules, effective for year of assessment 2019, including:

  • Companies that fall outside the scope of the cost plus mark-up basis but have adopted that treatment
  • Service companies that are on the cost plus mark-up basis but are seeking to make tax adjustments and tax claims


Read a March 2018 report [PDF 634 KB] prepared by the KPMG member firm in Singapore

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