14 October 2015

The Inland Revenue Authority of Singapore (IRAS) has updated its website with content on the tax treatment for companies servicing only their related companies.

The nature of services that the service company may provide includes management, technical support, procurement, administrative support and customer support. Generally, a service company may provide services to its related companies for free, at cost; at non-arm’s length prices and at arm’s length prices.

The update relates to:

• content rewritten on the basis of assessment to provide more clarity, as well as
• new FAQs inserted.

The new FAQs relate to:

• explanation for the basis of assessment for a service company that adopts the cost plus mark-up basis of assessment which does not qualify for the claims of tax deductions, PIC benefits, capital allowances, losses, donations and foreign tax credit;
• how a service company, which adopts the cost plus mark-up basis of assessment, brings to tax the payments received from the Wage Credit Scheme (WCS).

The update was made on 9 October 2015.

For further details, please refer to the IRAS website.

Source: IRAS