Insights & publications.

The Agreement for the Elimination of Double Taxation with respect to Taxes on Income (DTA) between Singapore and Kenya entered into force on 20 April 2026.

The DTA will enhance the cross-border trade and investment between both countries. It lowers the withholding tax rates on income flows arising from cross-border business activities, and stipulates the taxing rights of both jurisdictions to minimise double taxation.

The withholding tax rates under the DTA are as follows:

• dividends — 8%; exempted from tax if paid to the government
• interest — 10%; exempted from tax if paid to the government
• royalties — 10%
• technical fees — 10%

Source: Avoidance of Double Taxation Agreement Between Singapore and Kenya Enters into Force, Ministry of Finance website, 20 April 2026, accessed 21 April 2026

The Accounting Standards Committee (ASC) of Singapore has submitted their comment letter on the International Accounting Standards Board’s (IASB) Exposure Draft on changes to the fair value option in IAS 28.

The ASC agrees that the proposed amendments are useful because they clarify who can apply fair value accounting for investments in associates and joint ventures. This clarity is important to reduce differences in practice and to prepare for the introduction of IFRS 18. The ASC generally supports the IASB’s proposals, but raises 2 main points:

• Unrestricted fair value option: The ASC’s stakeholders strongly support allowing all entities to apply the fair value option, rather than limiting it to certain types of investors. They agree that this could improve financial reporting and provide more useful information to users. However, the ASC accepts that, due to time constraints, the IASB should proceed with the current limited amendments first and consider a broader fair value option as a future project
• Irrevocable fair value election: The ASC notes that the fair value choice cannot be reversed once made. The ASC asks the IASB to clarify how this requirement applies when an entity’s status or business model changes, such as when it ceases to be an investment entity. If this cannot be addressed at this stage, the ASC suggests that it should be considered in a future project.

The ASC agrees with IASB’s proposal that the amendments should take effect at the same time as IFRS 18.

Source: Response to Exposure Draft on Amendments to the Fair Value option for Investments in Associates and Joint Ventures, IFRS, 20 April 2026, accessed 21 April 2026.

Singapore has signed the Multilateral Competent Authority Agreement (MCAA) on the Exchange of Global Anti-Base Erosion (GloBE) Information to participate in the central filing of the GloBE Information Return (GIR).

Under the GloBE rules, each entity of a multinational enterprise (MNE) group subject to Pillar Two GloBE rules would be required to file a GIR with the tax administration of the jurisdiction in which it is located. However, under the central filing arrangement, this filing may not be required if the MNE group files the GIR in a jurisdiction that has an active exchange relationship with the local jurisdiction for the exchange of the GIR.

Singapore will share GIR information only with international partners that have the necessary safeguards in place to ensure the confidentiality of the information exchanged and to prevent its unauthorised use.

Source: Singapore Signs Multilateral Competent Authority Agreement on the Exchange of Global Anti-Base Erosion Information to Minimise Compliance Burden for Multinational Enterprise Groups, IRAS website, 15 April 2026, accessed 16 April 2026

The Income Tax Board of Review has dismissed a taxpayer’s appeal against the assessment of income tax on gains from disposal of leasehold interest to a real estate investment trust (REIT). The taxpayer's shares were indirectly held by a substantial stapled securityholder of a trust comprising the REIT and a business trust.

Facts

The Appellant, GIX, was incorporated in 2006 as QGN Pte Ltd and had developed, owned and operated the building known as “PMY” which opened in May 2008.

On 15 April 2011, the shares in QGN was disposed to DYB Pte Ltd, a wholly owned subsidiary of SVN Limited and the Appellant was then renamed GIX. At the time of the change of shareholders, GIX was negotiating with its lessor to lease a vacant site (Adjacent Site) next to the site on which PMY had been built (PMY Site) so that an extension to PMY (Building Extension) could be constructed.

After the shareholder change, the negotiations and discussions with the lessor on the lease of the Adjacent Site continued and eventually a building agreement dated 20 November 2014 which covered the lease for both the PMY Site and the Adjacent Site (Building Agreement) was exercised.

On 28 November 2014, GIX entered into a sale and purchase agreement for the sale of PMY to SVN Real Estate Investment Trust (SVN REIT) on an as-is basis (PMY SPA) and a second sale and purchase agreement for the sale of PMYEX to SVN REIT on a completed basis (PMYEX SPA). SVN Limited was a substantial stapled securityholder in SVN Trust comprising SVN REIT and SVN Business Trust. GIX derived a gain from the PMYEX SPA (PMYEX Gain) while it remained responsible for the operation and management of PMY and PMYEX.

The Comptroller of Income Tax (CIT) treated GIX’s gain on the disposal of PMY as capital in nature and the PMYEX Gain as income in nature and taxable under s 10(1)(g) of the Income Tax Act 1947. GIX appealed against the CIT’s assessment of the PMYEX Gain to tax.

Decision

The appeal was dismissed.

In reaching its decision, the Board reasoned that:

• In seeking to ascertain the “intention at the time of acquisition” for the purposes of s 10(1)(g), one is not seeking to ascertain when precisely acquisition occurred. Ultimately, one is seeking to discern the taxpayer’s intention in acquiring “the property generating the profit or gain”, whether this was “for the purpose of profit-making by the means giving rise to the profit”.
• GIX is correct in contending that regard must be had to “all surrounding facts and circumstances over a period of time”. However, the point of the inquiry is to ascertain GIX’s intention for acquiring the leasehold interest in the Adjacent Site for development into PMYEX. The ascertainment is ultimately a fact sensitive inquiry in respect of which other precedents and authorities will not be helpful.
• The evidence suggests that in or around May or July 2013, GIX was willing to consider divesting its interest in the Adjacent Site (post development to PMYEX) along with PMY. There is also no evidence that this intention has subsequently changed and in fact the intention was eventually materialised on 28 November 2014 when the PMYEX SPA was signed. GIX has therefore failed to discharge its burden of showing that the leasehold interest in the Adjacent Site was acquired with a view to long-term investment.
• GIX’s arguments in support of its contention that the sales of PMYEX was for a “capital purpose” based on the permanent structure argument were also not persuasive.

Source: GIX v The Comptroller of Income Tax [2026] SGITBR 2, 6 April 2026, accessed 13 April 2026

As previously announced in the Budget 2026 Statement:

• a corporate income tax rebate (CIT Rebate) of 40% of tax payable will be available for year of assessment 2026
• companies that are active and employed at least one local employee in calendar year 2025 will receive a CIT Rebate Cash Grant of $1,500 by the second quarter of 2026
• the maximum total benefits of CIT Rebate and CIT Rebate Cash Grant that a business may receive will be $30,000.

To support businesses in managing cash flow amid the Middle East situation, Acting Minister for Transport and Senior Minister of State for Finance, Mr Jeffrey Siow, has announced in a Ministerial Statement on 7 April 2026 the following enhancements:

• the CIT Rebate will be increased to 50% of tax payable
• the CIT Rebate Cash Grant will be raised to $2,000
• the maximum total benefits of the CIT Rebate and CIT Rebate Cash Grant will be increased to $40,000.

Source: Ministerial Statement on Impact of the Middle East Situation on Singapore by Acting Minister for Transport and Senior Minister of State for Finance Mr Jeffrey Siow, Ministry of Finance website, 7 April 2026, accessed 8 April 2026

Regulations relating to tax incentives for debt securities were amended on 2 April 2026. The key amendments include:

• extending the qualifying debt securities (QDS) scheme and tax exemption on income derived by primary dealers from trading in Singapore Government securities until 31 December 2028
• allowing the qualifying project debt securities (QPDS) scheme to lapse after 31 December 2025
• streamlining the scope of qualifying income under the QDS scheme and QPDS scheme to include all payments relating to early redemption of QDS and QPDS
• rationalising conditions relating to arrangements for QDS and QPDS for securities issued from 15 February 2023.

Source: Income Tax (Concessionary Rate of Tax or Exemption for Income Derived from Debt Securities) (Amendment) Regulations 2026; Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2026; Income Tax (Qualifying Project Debt Securities) (Amendment) Regulations 2026, Government Gazette, 2 April 2026, accessed 6 April 2026

The Income Tax (Refundable Investment Credits) Regulations 2025 (Regulations) were amended on 1 April 2026 to prescribe the following items relating to Refundable Investment Credits (RICs):

• prescribed circumstances for amending a letter of confirmation under s 93B(20A) of Income Tax Act 1947
• prescribed period within which an amalgamated company must apply to transfer RICs (s 93B(43)(c))
• method of application for offset of due taxes of related company, and
• prescribed date for the purpose of s 93B(48D).

Additional amendments have also been issued to enhance the powers of the Economic Development Board and Enterprise Singapore Board in administering the RIC scheme:

• Income Tax (Assignment of Functions under Section 3A — Economic Development Board) (Amendment) Notification 2026
• Income Tax (Assignment of Functions under Section 3A — Enterprise Singapore Board) (Amendment) Notification 2026

Source: Income Tax Act 1947 - Income Tax (Refundable Investment Credits) (Amendment) Regulations 2026, Income Tax (Assignment of Functions under Section 3A — Economic Development Board) (Amendment) Notification 2026, Income Tax (Assignment of Functions under Section 3A — Enterprise Singapore Board) (Amendment) Notification 2026, Government Gazette, 1 April 2026, accessed 2 April 2026

The trustee of a real estate investment trust (REIT) established and listed in Singapore has issued a tranche of subordinated perpetual securities.

The ruling considers whether

• the securities will be regarded as “debt securities” for the purposes of s 43H(4) of the Income Tax Act 1947 and Regulation 2 of the Income Tax (Qualifying Debt Securities) Regulations
• distributions (including any optional distribution) payable on the securities will be treated as interest payable on indebtedness and qualify for the tax concessions and exemptions available for qualifying debt securities (QDS), subject to the relevant conditions being met, and
• the issuer is entitled to claim tax deductions on the distributions (including any optional distribution) payable on the basis that such distributions are regarded as interest under s 14(1)(a).

Source: Advance Ruling (Income Tax) Summary No. 6/2026, IRAS website, 1 April 2026, accessed 2 April 2026

Company A is a Singapore-incorporated and tax-resident company that holds strategic investments in entities across the Asia-Pacific region and earns interest income from related-party loans, and is therefore regarded as a non-pure equity-holding entity (non-PEHE). Company A disposed of shares in a foreign company during the basis period for year of assessment (YA) Y and remitted the gains to Singapore.

The ruling considers whether Company A satisfies the prescribed economic substance requirements to qualify as an “excluded entity” under s 10L of the Income Tax Act 1947 for the YAs Y to Y+4.

Source: Advance Ruling (Income Tax) Summary No. 5/2026, IRAS website, 1 April 2026, accessed 2 April 2026.

Section 92K of the Income Tax Act 1947 provides for a 10% or 20% Listing Corporate Income Tax (CIT) Rebate to encourage companies to raise public capital and expand their economic activities in Singapore.

Companies and registered business trusts including infrastructure investment trusts that have completed or are in the process of listing on a Singapore exchange on or after 19 February 2025 may now apply for the Listing CIT Rebate using the new online form, "Apply for the Listing Corporate Income Tax (CIT) Rebate".

The form must be submitted by an authorised representative of the applicant. Applications submitted by third parties on behalf of the applicant will not be processed.

Applicants are also required to upload a duly-completed Listing CIT Rebate Projection Template as a supporting document when submitting the online form.

Source: Listing Corporate Income Tax Rebate for New Corporate Listings in Singapore, Enterprise Singapore website, 1 April 2026, accessed 2 April 2026

A company must meet the continuity of ownership requirement under s 23(4) and 37(12) of the Income Tax Act 1947 when utilising trade losses, capital allowances or unabsorbed donations that are carried forward or carried back.

The Minister or the Comptroller may waive this requirement where there has been a substantial change in shareholders, provided that the change arises from one of the following circumstances:

• genuine commercial reasons not for the purpose of deriving any tax benefit or obtaining any tax advantage
• nationalisation
• privatisation of government-owned enterprise
• stocks of the company or that of its holding parent company being publicly listed and traded in a recognised stock exchange.

Previously, such waivers were typically requested via a letter submitted to the IRAS. The IRAS has now indicated that applications must be made using the new online form Application for Waiver of Shareholding Test.

Source: Unutilised Items (Capital Allowances, Trade Losses & Donations), IRAS website, 31 March 2026, accessed 1 April 2026

On 2 November 2023, the Government of Singapore and the Government of Cambodia signed a second protocol amending the Agreement between Singapore and Cambodia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (DTA) and the Protocol to the DTA.

This newly signed protocol introduces a new Article 28 (Entitlement of Benefits) relating to the principal purpose test and other technical amendments.

The new protocol entered into force on 6 March 2026

Source: Protocol to Avoidance of Double Taxation Agreement Between Singapore and Cambodia Enters Into Force, Ministry of Finance website, 6 March 2026, accessed 9 March 2026.

The Income Tax Board of Review has granted consent for a taxpayer to introduce new grounds of appeal in an income tax dispute concerning capital allowance claims for a cement silo.

Facts

A taxpayer, GIW, appealed to the Income Tax Board of Review against the disallowance of capital allowances for expenditure incurred in the construction of a cement silo.

The Comptroller contended that in GIW’s Petition of Appeal (POA), the sole ground advanced was that the disputed capital expenditure should have been allowed under s 19A of the Income Tax Act 1947 on the basis that the cement silo constituted an “integrated whole”, in accordance with the test laid down in ZF v Comptroller of Income Tax [2010] [¶70-008] SGCA 48 (ZF).

However, in its Opening Submissions, GIW expressly stated that it was no longer relying on the “integrated whole” approach. Instead, GIW argued that specific components of the cement silo, namely, the “inverted cone”, the “silo walls” and the “silo discharge system” constituted “plant” or alternatively “machinery”, in their own right.

On this basis, the Comptroller argued that GIW was introducing new grounds of appeal for which the Board’s consent was required. It was also the Comptroller’s position that consent should not be granted.

GIW maintained that it was not relying on new grounds. GIW argued that its ground of appeal in the POA was simply that the Comptroller had erred in concluding that the cement silo was not utilised for the purposes of GIW's trade or business as a “plant”.

GIW explained that the change in approach was necessitated by the Singapore High Court's decision in Singapore Cement Manufacturing Co (Pte) Ltd v Comptroller of Income Tax [2023] [¶70-601] 5 SLR 1099 (SCMC), where the court held that a cement silo is a building rather than a plant.

GIW further contended that if the Board considered it to be relying on new grounds, consent should nevertheless be granted.

Decision

The Board held that GIW’s Opening Submissions contained new grounds of appeal that had not been stated in the POA and for which consent under s 79(12) was required. The Board nevertheless granted consent to GIW to rely on the new grounds, subject to terms addressing any prejudice caused to the Comptroller.

In reaching its decision, the Board reasoned that:

• The sole ground of appeal in the POA was that the cement silo, when regarded as an integrated whole, qualified as a plant. GIW's revised argument that specific components constituted plant or machinery, introduced new grounds of appeal.
• Section 79 (12) does not stipulate specific requirements for granting consent. Regulation 5(3) of the Income Tax (Appeals Procedure for Board of Review) Regulations 2023, which sets out prerequisites for introducing new grounds, did not apply because it applies only to appeals lodged on or after 1 April 2025. The present appeal was lodged in August 2022.
• The new grounds were raised before the commencement of the hearing and before cross-examination of witnesses. Although the arguments could have been raised earlier, particularly since the SCMC decision was released in 2023, the delay was not so significant as to justify refusing consent.
• Any costs wasted due to GIW’s lateness could be compensated by an award of costs to the Comptroller.
• Any evidential prejudice to the Comptroller could similarly be remedied.
• In any event, even if the new grounds had been included in the POA, the Comptroller would not have been able to conduct audits or compel the production of documents and information.

Source: GIW v The Comptroller of Income Tax [2026] SGITBR 1, 26 February 2026, accessed 3 March 2026

Company A is incorporated in Singapore and carries on a business in Singapore. The company has acquired several floors of a property for its own use as office premises. The property has now been sold to a related party so as to improve Company A’s solvency position.

The subject of the ruling is whether the sale of the property constitutes a capital transaction.

Source: Advance Ruling (Income Tax) Summary No. 4/2026, IRAS website, 2 March 2026, accessed 3 March 2026.

The filing deadline for the 2026 income tax return for resident individuals is 18 April 2026.

Individuals who are resident in Singapore and have income exceeding $22,000 or net business income exceeding $6,000 for the year of assessment (YA) 2026 are required to submit an income tax return for the YA 2026 via electronic filing or by using the prescribed forms. The relevant forms are:

• Form B for individuals deriving income from carrying on a trade, business, profession or vocation, and
• Form B1 for all other individuals.

Individual taxpayers who have been selected for the No-Filing Service (NFS) scheme are not required to file a tax return.

Taxpayers who are required to file but have not received the Form B or Form B1 by 15 March 2026 must obtain the relevant forms from the Inland Revenue Authority of Singapore (IRAS).

Source: Notice to Individuals to Submit Return of Income for the Year of Assessment 2026, Government Gazette, 27 February 2026, accessed 2 March 2026

The International Accounting Standards Board (IASB) has issued a consultation proposing targeted amendments to clarify which investments may be measured using the fair value option under IAS 28 Investments in Associates and Joint Ventures.

This consultation follows feedback from stakeholders indicating inconsistency in how the fair value option in IAS 28 is applied, as well as concerns about how this inconsistency affects the presentation of income and expenses in the statement of profit or loss under IFRS 18 Presentation and Disclosure in Financial Statements. The matter has become more significant as an increasing number of companies consider electing this option when implementing IFRS 18.

The IASB’s proposed narrow-scope amendments are intended to enhance consistency in application and provide timely clarification ahead of IFRS 18 becoming effective.

To ensure that any amendments can be finalised in time for IFRS 18’s implementation, the IASB has established a shorter comment period. The consultation is open until 20 April 2026, and the IASB intends to complete any amendments by mid-2026, allowing jurisdictions sufficient time to incorporate them into national requirements.

Source: IASB consults on clarifying the fair value option in IAS 28, IFRS, 19 February 2026, accessed 20 February 2026.

The Singapore Trade Office in Taipei and the Taipei Representative Office in Singapore signed a new Agreement for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance (DTA) on 31 December 2025.

This DTA entered into force on 13 February 2026 and replaces the earlier DTA that took effect in 1982.

The withholding tax rates under the DTA are as follows:

• dividends — 10%
• interest — 10% (the reduced rate does not apply to interest on funds connected with the operations of ships or aircraft in international traffic; payments between banks and payments to certain government entities or specified funds are exempt)
• royalties — 10%.

Remuneration derived from the management, control or supervision of the trade, business or other activity of another enterprise or concern, or remuneration for labour or personal services is no longer excluded from the Business Profits Article. A service permanent establishment provision has also been introduced. Under this provision, furnishing of services within a territory for a period or periods exceeding an aggregate of 183 days within any 12-month period will create a permanent establishment in that territory.

Source: Ministry of Finance, Tax Agreement Between the Singapore Trade Office in Taipei and the Taipei Representative Office in Singapore Enters Into Force, 13 February 2026, accessed 16 February 2026.

The Prime Minister and Minister for Finance, Mr Lawrence Wong, delivered the 2026 Budget Statement at 3:30pm on 12 February 2026.

The Budget contains various tax measures to advance Singapore’s refreshed economic strategy, harness artificial intelligence as a strategic advantage, build a resilient and skilled workforce and strengthen Singapore’s culture of giving.

The full Budget Statement is available at https://www.singaporebudget.gov.sg/budget-speech.

The tax highlights are set out below.

Business tax

• Providing a 40% Corporate Income Tax rebate in year of assessment (YA) 2026
• Enhancing the Double Tax Deduction for Internationalisation scheme
• Expanding the scope of the Enterprise Innovation Scheme
• Extending withholding tax exemptions for the financial sector
• Extending and enhancing the Finance and Treasury Centre incentive
• Extending and enhancing the scope of the Global Trader Programme
• Extending the Not-for-Profit Organisation Tax Incentive
• Allowing tax deductions for Central Provident Fund cash top-ups made by platform operators
• Allowing the Investment Allowance for Emissions Reduction scheme to lapse
• Allowing the double tax deduction for qualifying upfront costs attributable to rated retail bonds to lapse
• Extending the 250% tax deduction for qualifying donations to Institutions of a Public Character and eligible institutions
• Extending the Corporate Volunteer Scheme

Other taxes

• Reducing the Preferential Additional Registration Fee rebate
• Increasing tobacco duties

Source: Budget Statement, Ministry of Finance website, 12 February 2026, accessed 12 February 2026.

Companies incorporated in Singapore and foreign companies registered with the Accounting and Corporate Regulatory Authority (ACRA) are required to file an income tax return for YA 2026 with the Inland Revenue Authority of Singapore (IRAS) by 30 November 2026 if they:

• were incorporated in Singapore on or before 31 December 2025 or were registered with the ACRA between 1 January 2025 and 31 December 2025, and
• have commenced business (even if they did not receive income or incurred losses in the accounting periods that ended in 2025) or have derived any income for YA 2026.

A foreign company must also file an income tax return for YA 2026 if it has Singapore-sourced or deemed Singapore-sourced income for YA 2026 and withholding tax has not been fully deducted and paid to the Comptroller.

Companies for which winding up proceedings commenced on or before 31 December 2025 are not required to file the income tax return for YA 2026.

Source: Notice to Companies to Furnish Return of Income for the Year of Assessment 2026, The Government Gazette, 6 February 2026, accessed 9 February 2026.

Sections 4 and 6 of the IRAS e-Tax Guide, “Avoidance of Double Taxation Agreements (“DTAs”)”, were updated on 30 January 2026 to reflect the recent changes in the Organisation of Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital (MTC) and OECD’s commentary on the MTC.

In particular, when determining whether an enterprise has a permanent establishment in a state, the existence and extent of work performed from a home or other informal location in that state must be considered. Such locations are those that are used by the enterprise on a continuous basis for carrying on its business and which had effectively been placed at the disposal of the enterprise.

It is also now emphasised that for source states to agree under a double taxation agreement to limit taxation of royalties, interest and dividends arising in their jurisdictions, the beneficial owner of such income must typically be a tax resident of the other contracting state.

The sections relating to the mutual agreement procedure and arbitration have also been updated. Some of the updates can be similarly found in the IRAS e-Tax Guide "Transfer Pricing Guidelines".

Source: Avoidance of Double Taxation Agreements, IRAS website, 4 February 2026, accessed 5 February 2026

The IRAS has published the list of Reportable Jurisdictions for calendar year 2025 Common Reporting Standard (CRS) Information reporting. Reporting Singaporean Financial Institutions (SGFIs) are required to transmit to the IRAS financial account information for accounts held by persons that are tax residents of these Reportable Jurisdictions in the list, by 31 May 2026. This requirement applies to accounts maintained by the SGFIs in calendar year 2025.

Rwanda, Senegal and Uganda have been added to the list of Reportable Jurisdictions for calendar year 2025. Curacao has been removed from the list.

Rwanda, Senegal and Uganda have also been added to the List of Participating Jurisdictions with effect from 2 February 2026. Under the Income Tax (International Tax Compliance Agreements) (Common Reporting Standard) Regulations 2016, where a Reporting SGFI maintains an account for a professionally managed Investment Entity (as described in sub-paragraph A(6)(b) of Section VIII of the CRS) that is not a Participating Jurisdiction Financial Institution, the Reporting SGFI is required to treat that Investment Entity as a Passive Non-Financial Entity and apply the "look through" approach to identify the Controlling Persons of that Investment Entity.

Source: CRS Overview and Latest Developments, IRAS website, 2 February 2026, accessed 3 February 2026

In its media release dated 2 February 2026, the IRAS has announced the following:

• The IRAS has enhanced the Auto-Inclusion Scheme (AIS) Digital Service. For example, AIS employers can now submit employment income information for up to 4 back years instead of 2.
• In 2025, more than 12,000 employers missed the AIS filing deadline. The IRAS reminded employers on AIS that failure to submit employees' employment income information through AIS by 1 March 2026 may result in a fine of up to $5,000 under s 94(1) of the Income Tax Act 1947. Company directors, precedent partners or other key personnel may also be fined up to $10,000 and face imprisonment for a term of up to 12 months if they fail to respond to the IRAS’ notices.
• Common AIS filing errors made by employers include omission of taxable benefits-in-kind and benefits recorded outside the payroll system, incorrect reporting of accommodation benefit and under-reporting of equity-based remuneration.
• Submitting inaccurate employees’ employment income information is an offence and may result in a penalty of up to double the amount of tax undercharged. Employers are encouraged to voluntarily disclose past errors or omissions immediately under the IRAS’ Voluntary Disclosure Programme.

Source: 123,000 AIS Employers to Submit Employees’ Employment Income Data by 1 Mar 2026, Enabling IRAS to Pre-fill Over 2 Million Tax Returns, IRAS website, 2 February 2026, accessed 3 February 2026

The IRAS e-Tax Guide "Group Relief System" was revised on 30 January 2026, incorporating the following updates:

• a list of documents that newly incorporated companies must submit when claiming or transferring losses under the group relief system, where their first set of accounts covers a period exceeding 12 months
• a list of common errors made by taxpayers when claiming or transferring losses under the group relief system.

One of the common errors highlighted is that when companies claim group relief, either or both the transferor and claimant submitted Form C-S or Form C-S (Lite) instead of Form C.

Source: Group Relief System, IRAS website, 30 January 2026, accessed on 30 January 2026

On 30 January 2026, the IRAS updated the e-Tax Guide "Intellectual Property Rights Valuation Report for Purposes of Section 19B of the Income Tax Act 1947" to provide further clarifications including:

• factors to consider when determining the amount qualifying for writing down allowance where the open market price of the qualifying intellectual property rights (IPRs) is not available
• the requirement to provide a breakdown of the value of the IPRs into qualifying and non-qualifying IPRs where the IPRs are acquired as part of a business acquisition or in combination with other assets
• internationally accepted valuation standards, including (but not limited to) the International Valuation Standards
• clarification that the IPRs being valued should exclude the value of future IPRs that are not present at the point of transaction but are expected to be developed after the acquisition

The IRAS has also indicated that paragraphs 5.1.2, 5.1.5, 6.2 and 7 have the force of law.

Source: Intellectual Property Rights Valuation Report for Purposes of Section 19B of the Income Tax Act 1947, IRAS website, 30 January 2026, accessed 30 January 2026

The IRAS updated various e-Tax Guides to state the conditions and requirements prescribed by the Comptroller pursuant to legislative provisions that have the force of law. These include conditions and requirements set out in the following e-Tax Guides:

• Tax Treatment of Employee Stock Options And Other Forms of Employee Share Ownership Plans
• Carry-back Relief System
• Enhanced Carry-back Relief System
• Securities Lending and Repurchase Arrangements
• Income Tax Implication Arising from the Adoption of FRS 39 – Financial Instruments: Recognition & Measurement
• Intellectual Property Rights Valuation Report for Purposes of Section 19B of the Income Tax Act 1947
• Qualifying Conditions for Pension/Provident Funds to be approved under Section 5 of the Income Tax Act

Source: IRAS e-Tax Guides, IRAS website, 30 January 2026, accessed 30 January 2026

Two taxpayers have appealed against the decision of the Comptroller of Income Tax to assess as employment income certain payments made pursuant to an agreement which they were party to for the sale of a company. The appeals were allowed.

Facts

On 1 April 2005, the Appellants joined ZDRA Pte Ltd, a company incorporated in Singapore, with UZF appointed as the Managing Director and Chief Executive Officer of ZDRA Pte Ltd and CLQ appointed as its director. ZDRA Pte Ltd and 2 other companies were wholly owned subsidiaries of ZDR Ltd. An individual, NIR, wholly owned the shares in ZDR Ltd.

NIR, UZF, CLQ and XHS Europe B.V. (Buyer) entered into a sale and purchase (SPA) dated 9 January 2014 for the sale and purchase of all the issued shares of ZDR Ltd. NIR, UZF and CLQ also all entered into new contracts of employment with ZDRA Pte Ltd on 9 January 2014.

Under the SPA, NIR, UZF and CLQ were each paid a Base Price and Annual Additional Price. The Annual Additional Price comprised 6 annual payments each to UZF and CLQ between 2015 and 2020. The amount of each annual payment was calculated based on the net revenue or net profit or losses of the Buyer and its affiliates, and from date of completion of the SPA, includes ZDR Ltd and its 3 subsidiaries.

The Base Price and Annual Additional Price paid to UZF and CLQ are collectively the “Disputed Amounts”.

The Board has to determine if the Disputed Payments made to UZF and CLQ arose from their employment in ZDRA Pte Ltd or were capital payments forming part of the consideration for NIR’s shares in ZDR Ltd.

Bearing in mind the principles and factors laid down in ABB v Comptroller of Income Tax MSTC 70-000; [2010] SGHC 46, the Board examined the following issues:

• whether UZF and CLQ were quasi-owners of ZDRA Pte Ltd
• whether UZF and CLQ entered into the SPA and gave the warranties and undertakings in their capacity as quasi-owners or employees of ZDRA Pte Ltd
• purpose for the payment of the Disputed Payments in the SPA, and
• other relevant factors in ABB to consider.

Decision

1. The Board agrees that UZF and CLQ were quasi-owners of ZDRA Pte Ltd. The fact that UZF and CLQ declared their shares of profits from 2005 to 2013 as director’s fees did not go on to show that those sums were not paid to them in their capacity as quasi-owners of the company.

2. The Disputed Payments were paid in consideration for the warranties and undertakings given by UZF and CLQ, as expressly stated in the SPA.

3. While the SPA contained obligations on UZF and CLQ in their capacity as “Warrantors”, it did not contain provisions which dealt with their obligations in their capacity as “Key Employees”. The use of the term “Key Employees” or “Key Employee” was a convenient way to define or classify them in the SPA.

4. The provisions for clawing-back of Base Price and forfeiture of Annual Additional Price were mechanisms to adjust the total consideration payable by the Buyer in circumstances which would impact the value of the acquisition to the Buyer.

Source: UZF and another v The Comptroller of Income Tax [2025] SGITBR 4, 23 December 2025, accessed 19 January 2026

A taxpayer appealed to the Valuation Review Board (the Board) for leave to amend its notice of appeal in relation to the annual value of its property.

Facts

The Appellant, Shaw Towers Realty (Pte.) Limited (Shaw Towers), is the owner of a land site located at Beach Road (the property).

Shaw Towers lodged a notice of appeal dated 9 January 2023 with the Board against the Chief Assessor’s decision on the annual values of the property. In its notice of appeal, Shaw Towers proposed annual values of $40,049,000 and $42,336,000 for the property with effect from 1 January 2021 and 13 January 2021 respectively.

On 29 April 2024, Shaw Towers informed the Chief Assessor of its intention to amend its original notice of appeal and the proposed annual values. Shaw Towers sought to rely on the lower annual values of $35,586,000 and $37,618,000 with effect from 10 August 2020 and 13 January 2021 respectively. The Chief Assessor objected to the proposed amendments.

Shaw Towers subsequently applied to the Board for leave to amend the notice of appeal and the proposed annual values. In support of its application, Shaw Towers argued that it had a new ground of appeal, namely the residual method of valuation. It relied on a circular and an addendum issued by the Singapore Institute of Surveyors and Valuers (SISV) on 8 January 2024 and 14 March 2024 respectively, which stated that the residual method “ought to be taken into account in the valuation of land”. As these documents were issued after the notice of appeal was filed, Shaw Towers contended that it was unable to rely on them at the time of filing.

Decision

The Board declined to exercise its discretion to grant leave to amend the notice of appeal, for the following reasons:

• While a broad interpretation of Reg 7 of the Valuation Review Board (Appeals Procedure) Regulations may permit the Board to determine the procedure at the hearing of any proceedings such that the Board may exercise the discretion to consider new grounds of appeal at the stage of a preliminary application in support of the proposed annual values, the regulation is silent on whether the annual values in dispute can be amended.
• The application of the residual method does not constitute a new ground of appeal. Notably, the residual method is not a new valuation method.
• Shaw Towers sought to conflate the proposed annual values with the grounds of appeal.
• Although the Property Tax (Appeals Procedure for Valuation Review Board) Regulations 2025 does prescribe the procedures for amending a notice of appeal, these regulations were not applicable to the case in appeal as the notice of appeal was lodged before 1 April 2025.
• The appointment of 2 expert witnesses to provide opinions on different valuation methods suggested that Shaw Towers had engaged in forum shopping to select the approach that would best support its case for a lower annual value.

Source: Shaw Towers Realty (Pte.) Limited v Chief Assessor [2025] SGVRB 1, 18 December 2025, accessed 15 January 2026

Application for the Enterprise Innovation Scheme (EIS) Cash Payout must be made via the "Apply for EIS Cash Payout" digital service. For the year of assessment 2026, the digital service will commence on:

• 1 February 2026 for partnerships
• 1 March 2026 for sole-proprietors
• 5 May 2026 for companies.

The digital service will only be made available after businesses have submitted their income tax returns before the income tax filing due date. The deadline for submitting the EIS Cash Payout application is:

• 18 April 2026 for partnerships and sole-proprietors
• 30 November 2026 for companies.

Source: Enterprise Innovation Scheme, IRAS website, 14 January 2026, accessed 15 January 2026

The IRAS has highlighted that the OECD Common Reporting Standard Frequently Asked Questions (CRS FAQs) and Crypto-Asset Reporting Framework: Frequently Asked Questions (CARF FAQs) were updated in December 2025.

The updates provide additional guidance on the Amended Common Reporting Standard (Amended CRS) and Crypto-Asset Reporting Framework (CARF), covering several topics relating to:

• identification of pre-existing and new accounts for new reporting financial institutions and new financial accounts
• digitally issued or tokenised financial assets
• specified electronic money products, including redemption requirements, change of status and multi-currency e-money products
• regular place of business nexus, including its application to branches and customer base
• naming convention for relevant crypto-assets
• reliance on third parties for reporting purposes.

Source: CRS Overview and Latest Developments, IRAS website, 12 January 2026, accessed 14 January 2026

CARF Overview and Latest Developments, IRAS website, 12 January 2026, accessed 14 January 2026

The Accounting and Corporate Regulatory Authority has issued the 2026 volume of the Singapore Financial Reporting Standards (International) SFRS(I)s, which are effective for annual reporting periods beginning 1 January 2026. The SFRS(I)s comprise standards and interpretations that correspond to the International Financial Reporting Standards issued by the International Accounting Standards Board.

Source: Source: Singapore Financial Reporting Standards (International) Effective for annual reporting period beginning on 1 January 2026, Accounting and Corporate Regulatory Authority, 13 January 2026, accessed 14 January 2026.

On 7 January 2026, the IRAS has updated the IRAS e-Tax Guide Income Tax: Tax exemption under section 13(12) for specified scenarios, real estate investment trusts and qualifying offshore infrastructure project/asset.

In the update, the IRAS has clarified how it will determine whether any tax is or has been paid in a tax jurisdiction for the purposes of s 13(12) and s 13(12A) tax exemption in view of the implementation of GloBE rules.

Tax will be regarded as having paid if a qualified domestic minimum top-up tax (QDMTT), or a tax that is substantially similar to any QDMTT, has been paid under the law of that jurisdiction.

Taxes paid in Singapore would include the domestic top-up tax (DTT) under the Multinational Enterprise (Minimum Tax) Act 2024.

The updates also clarify that reference to headline tax rate of a foreign tax jurisdiction refers to the highest corporate tax rate of the foreign jurisdiction in the year the specified foreign income is received in Singapore. In relation to this, any QDMTT, qualified Income Inclusion Rule (IIR), qualified Undertaxed Profits Rule (UTPR) and any tax that is substantially similar to these taxes, levied under the law of that jurisdiction will not be taken into consideration.

Source: IRAS e-Tax Guide Income Tax: Tax exemption under section 13(12) for specified scenarios, real estate investment trusts and qualifying offshore infrastructure project/asset, IRAS website, 7 January 2026, accessed 8 January 2026

On 9 January 2026, the IRAS has updated the IRAS e-Tax Guide Tax Framework for Transfer of Business by Insurers to reflect the following:

• The Minister or the Comptroller of Income Tax (CIT) may extend the deadline for the transferor to transfer its non-insurance business to a transferee.
• The Minister or the CIT may also extend the deadline for the dissolution or winding up of the transferor.
• Any special GST input tax recovery formula granted to the transferor is non-transferable. If the transferee wishes to adopt the same special input tax recovery formula granted to the transferor, it must seek approval from the Comptroller of GST.

Source: IRAS e-Tax Guide Tax Framework for Transfer of Business by Insurers, IRAS website, 9 January 2026, accessed 9 January 2026

Where a Singapore payer applies a reduced Singapore withholding tax or withholding tax exemption under a tax treaty (treaty benefits) on payments made to a non-tax resident of Singapore, the Singapore payer must submit a copy of the non-tax resident’s certificate of residence (COR) to the IRAS.

The due date is 31 March of the following year if the payment to the non-tax resident is for a period in the current calendar year and within 3 months from the date of submission of the withholding tax form if the payment is for any preceding calendar year.

If the COR is not submitted by the due date, the IRAS may withdraw the treaty benefit and impose late withholding tax payment penalties.

The IRAS has now published a Request for Extension to Submit Certificate of Residence form. Singapore payers may use the form to request for up to 2 months of extension of time to submit the COR. The request for extension of time will be subject to the IRAS’ approval.

Source: Request for Extension to Submit Certificate of Residence, IRAS website, 9 January 2026, accessed 9 January 2026

On 7 January 2026, the IRAS updated the IRAS e-Tax Guide Multinational Enterprise Top-up Tax and Domestic Top-up Tax to reflect the following:

• Singapore’s Multinational Enterprise (Minimum Tax) Act 2024 (MMTA) obtained transitional qualified status with effect from 1 January 2025.
• Adjustments may be necessary to determine the annual revenue for the purpose of the revenue threshold (eg cost of sales and other operating expenses for the financial year may have to be added back).
• For a stateless entity that is a reverse hybrid entity formed, registered or incorporated in Singapore and is not a responsible member, Domestic Top-up Tax (DTT) imposed on it must be further deducted from the top-up amount.
• When translating relevant amounts in the financial statements of an MNE group from the ultimate parent entity's consolidated financial statement's presentation currency to Euros, even if the MNE group’s financial year ends in a month other than December, the average foreign exchange rate for December of the previous financial year is to be applied.
• A securitisation entity (MMTA s 2) would not be jointly and severally liable for the unpaid DTT and interest of the MNE group.
• A securitisation entity of an MNE group shall not be designated as a designated local DTT filing entity (DFE) or a designated local GloBE Information Return filing entity (GFE) for the MNE group unless it is the only constituent entity (CE) located in Singapore.
• When calculating the Multinational Enterprise Top-up Tax (MTT), covered taxes on the CE-owner of a reverse hybrid entity will be allocated to the reverse hybrid entity.
• When calculating the DTT, allocation of covered taxes is not required for reverse hybrid entities formed, registered or incorporated in Singapore where the CE-owner is located outside Singapore (the non-allocation rule does not apply to tax imposed under the Income Tax Act 1947, which is allocated to the reverse hybrid entity).
• The record keeping period is extended in respect of records for certain elections made (eg election to recognise asset gains over the look-back period).
• Where conditions are met, foreign tax credit may be allowed to a Singapore CE on foreign domestic minimum top-up tax paid by an entity of the MNE group on behalf of the group and recharged to the foreign entity.

Various new FAQs have also been added to Annex A and Annex B has been updated to reflect the June 2024 Administrative Guidance issued by the Inclusive Framework on the interpretation or administration of the GloBE Model Rules and changes in the Finance (Income Taxes) Act 2025.

Source: IRAS e-Tax Guide Multinational Enterprise Top-up Tax and Domestic Top-up Tax, IRAS website, 7 January 2026, accessed 8 January 2026

Company A is not a pure equity-holding entity (PEHE) as defined in s 10L(16) of the Income Tax Act 1947 (ITA). Company A derives mainly interest income and dividend income from related companies. Company A expects to divest some of its overseas subsidiaries in the financial year X (the basis period for year of assessment Y).

The subject of the ruling is whether Company A will satisfy the prescribed economic substance requirements to be regarded as an “excluded entity” under s 10L of the ITA for the years of assessment Y to Y+4.

Source: Advance Ruling (Income Tax) Summary No. 2/2026, IRAS website, 2 January 2026, accessed 2 January 2026.

Company A is not a pure equity-holding entity (PEHE) as defined in s 10L(16) of the Income Tax Act 1947 (ITA). It is an investment holding company that provides funding to its subsidiaries and associates by way of debt and additional equity injections. Company A had disposed of its shares in Company B during the financial year X (the basis period for the year of assessment Y) and derived gains from the disposal.

The subject of the ruling is whether Company A has satisfied the prescribed economic substance requirements to be regarded as an “excluded entity” under s 10L of the ITA and therefore, whether the gain is not subject to tax under s 10(1)(g) when remitted into Singapore.

Source: Advance Ruling (Income Tax) Summary No. 3/2026, IRAS website, 2 January 2026, accessed 2 January 2026.

The year of assessment 2026 income tax return filing date for partnerships, clubs and associations, management corporations, town councils, pension or provident funds or societies, estates, trusts, settlements and unit trusts is 15 April 2026. Partnerships that e-file their income tax returns can do so by 18 April 2026.

For partnerships, the notification to file Form P should be received by January 2026 and the Form P is generally available for filing from around 1 February of the year. Partnerships that do not receive the notification by January 2026 may contact the IRAS to request issuance of Form P to the precedent partner.

Source: Notice to Partnerships, Bodies of Persons, etc., to Submit Return of Income for the Year of Assessment 2026, The Government Gazette, 2 January 2026, accessed 5 January 2026.

Responsibilities of precedent partners, IRAS website, accessed 5 January 2026

On 5 January 2026, the OECD has released the Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Side-by-Side Package.

In the document, the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) announced its agreement to implement the following new safe harbours:

• a Side-by-Side Safe Harbour under which an MNE Group will not be subject to the Income Inclusion Rule (IIR) or Undertaxed Payment Rule (UTPR) if its ultimate parent entity (UPE) is located in a jurisdiction that has both an eligible domestic tax regime and an eligible worldwide tax regime
• an UPE Safe Harbour which will provide a safe harbour with respect to the domestic profits of MNE Groups headquartered in jurisdictions that have a pre-existing eligible domestic tax regime (but not an eligible worldwide tax regime), such that the MNE Groups will not be subject to the UTPR in respect of the profits located in the UPE jurisdiction
• a Substance-based Tax Incentive (SBTI) Safe Harbour which will allow an MNE Group to treat certain Qualified Tax Incentives (QTIs) as an addition to the covered taxes of constituent entities located in the jurisdiction.

The Inclusive Framework has also agreed on a package of simplifications to the Global Anti-Base Erosion Model Rules (Pillar Two), which includes a new permanent Simplified Effective Tax Rate (ETR) Safe Harbour. This safe harbour will be available to MNE Groups in all jurisdictions from the beginning of 2027 or from the beginning of 2026 in certain circumstances). Along with the implementation of the Simplified ETR Safe Harbour, the Transitional country-by-country reporting (CbCR) Safe Harbour will also be extended for another year.

Source: Side-by-Side Package, OECD website, 5 January 2026, accessed 6 January 2026

By Joanna Lam, Prerna Prakash Bathija

What has changed and how does it impact your TP policies within the wider global landscape

On 19 November 2025, the Inland Revenue Authority of Singapore (“IRAS”) released the e-Tax Guide: Transfer Pricing Guidelines (Eighth Edition) (“STPG 8th Ed”), incorporating a series of targeted TP amendments that collectively raise expectations around the quality of TP documentation (“TPD”), economic substance, and alignment of domestic TP guidance with global tax developments.

While the overarching framework remains familiar, several areas stand out as particularly meaningful for taxpayers navigating an increasingly rigorous TP environment in Singapore. The STPG 8th Ed introduces strengthened guidance on high-focus areas, including intragroup financing, simplified TPD preparation, strict pass-through cost arrangements and Mutual Agreement Procedure (“MAP”) rules. The launch of the pilot Simplified & Streamlined Approach (“SSA”) also signals IRAS’s intention to reduce disputes in lower-risk areas and further align with Organisation for Economic Co-operation and Development (“OECD”) guidance.

Strengthened guidance on related-party financial transactions

The most substantive updates in the STPG 8th Ed relate to financial transactions, reflecting sustained global emphasis on the pricing and structuring of intra-group funding. IRAS has expanded its guidance on the characterisation, pricing and documentation of related-party financing transactions, including:

• For pricing of domestic related-party loans entered on or after 1 January 2025, taxpayers can choose to apply either the IRAS indicative margin or determine the interest rate based on the arm’s length principle. Importantly, STPG 8th Ed clarifies that IRAS will not impose a TP adjustment (under Section 34D of the Singapore Income Tax Act (“SITA”)) for such domestic loans. The parties’ claim for deduction of interest expense will be assessed under Section 14(1)(a) of the SITA and subject to interest restriction, where appropriate. This is a welcome relief for taxpayers in the form of greater certainty and flexibility to arrange their domestic related-party funding structures.
• IRAS has clarified expectations on periodic reviews for related-party loans to ensure that their pricing and terms remain at arm’s length, particularly as economic conditions, collateral values, or borrower credit profiles evolve. Taxpayers should document each review, assess whether an independent lender would refinance or reprice such loan under comparable circumstances and maintain evidence where no change is needed.
• Clarifications regarding structuring of debt or equity funding - taxpayers should carefully assess their financing models to ensure there is underlying commercial rationale and economic substance. It is important to note that IRAS may disregard or vary arrangements which are connected to tax-avoidance, including treating hybrid instruments differently. Taxpayers should thus plan and document their financing arrangements to withstand such scrutiny.
• IRAS has also clarified that tax deduction will not be allowed on any interest expense in excess of the arm’s length amount determined by IRAS. This is notwithstanding that tax may have been withheld on the full interest payment to the foreign related party.

In recent years, financing arrangements have been a key focus area for IRAS and there has been enhanced guidance in the last few versions of the STPG. While the exemption from TP adjustments for domestic loans (entered on or after 1 January 2025) enhances flexibility for structuring shareholder loans, taxpayers should still review their existing loan portfolios and assess whether pricing remains at arm’s-length, in light of the enhanced guidance of debt vs equity funding.

TPD preparation: Stronger conditions on “Qualifying Past TPD” and strict pass-through costs

The STPG 8th Ed raises expectations for the discipline required when relying on prior-year TPD. IRAS has tightened the conditions under which taxpayers may rely on qualifying past TPD, emphasising the need for a formal declaration, along with the existing conditions that simplified TPD can only be prepared where there are no material changes to the transaction. Simply relying on previously prepared TPD without such a declaration no longer satisfies STPG’s compliance requirements.

IRAS has also strengthened its rules on strict pass-through costs, clarifying that invoices alone are insufficient as written agreements as they do not reflect an agreement that liabilities relating to the services are assumed by the related parties. Hence, taxpayers must demonstrate their basis for treating certain costs as pass-through, document that the payer performs no value-adding activities and maintains robust written arrangements supporting the pass-through classification.

These refinements signal IRAS’s continued emphasis on documentation quality as a cornerstone for enforcement of TP regulations. The message is clear: convenience-based or informal documentation practices which do not comply with the STPG conditions will not be sufficient. Taxpayers preparing simplified TPD or using pass-through mechanisms should perform internal health checks and ensure proper agreements and documentation are in place before year-end.

MAP and dispute resolution: Clearer pathways and new direction for protective MAP filings

IRAS has refined its MAP guidance to improve procedural clarity and treaty-based dispute resolution. The STPG 8th Ed introduces new guidance on:

• When taxpayers should consider filing a protective MAP within the stipulated time limit where taxpayers are initiating or have initiated domestic objections concurrently.
• The required information when submitting a protective MAP, including clear communication with IRAS that the request is protective in nature.
• How protective MAP interacts with ongoing domestic appeals.
• Expectations around pre-filing discussions, communication with foreign competent authorities, and issuance of confirmation or closing letters.

These enhancements reflect Singapore’s commitment to international best practices, recognising the importance of protective filings in preserving taxpayer’s treaty rights. Taxpayers with emerging or potential TP controversies should evaluate whether early protective MAP filings are warranted in the dispute resolution lifecycle. The refined guidance also suggests a shift toward a more structured and disciplined approach to MAP submissions, requiring taxpayers to be more deliberate in their MAP strategy and supporting analyses.

Launch of pilot SSA: Safe harbour for routine distribution activities

The introduction of the SSA pilot (for the period from 1 January 2026 to 31 December 2028) offers a potentially attractive safe harbour for qualifying routine distribution and marketing support functions, particularly in sectors with thin margins or recurring benchmarking challenges. Under the SSA pilot, qualifying taxpayers who adopt the prescribed margin will be deemed to meet the arm’s-length standard for the qualifying activities.

The pilot SSA may significantly reduce benchmarking requirements and audit exposure for routine functions. Taxpayers with baseline distribution operations should evaluate whether SSA adoption could provide predictability and reduce ongoing compliance costs.

Other notable refinements

In addition to the above major updates, IRAS has refined guidance across several other areas as part of the STPG 8th Ed:

• New examples and clarifications on capital transactions, including withholding tax implications and dispute resolution pathways.
• Expanded discussion on profit attribution to permanent establishments.
• Updated surcharge rules on recalculating the 5% TP surcharge when adjustments change.

Key takeaways and recommended actions

The STPG 8th Ed edition reflects continuity with clearer expectations, rather than a radical overhaul. However, the depth of revisions, particularly in financial transactions, simplified TPD requirements and the introduction of new sections, signals rising expectations on technical quality, transparency and consistency with respect to TP compliances.

Taxpayers should view these changes not as administrative updates, but as signs of a maturing TP enforcement environment. Now is an opportune time to:

• Review financing arrangements,
• Assess pass-through costs classifications and reliance on historical TPD,
• Evaluate MAP and dispute resolution strategies, and
• Consider participation for the SSA pilot.

A proactive TP health check will help taxpayers to identify and assess any potential gaps in their existing TP frameworks and future-proof their TP compliances.

Joanna Lam (Partner) and Prerna Prakash Bathija (Director) are part of the Transfer Pricing team at RSM Singapore.

This article was originally published by RSM Singapore on 24 November 2025 and is reproduced with permission.

If you require any further information, please do not hesitate to contact Ms Joanna Lam (Partner, Transfer Pricing) at JoannaLamLY@RSMSingapore.sg or +65 6594 7896 and Ms Prerna Prakash Bathija (Director, Transfer Pricing) at PrernaBathija@rsmsingapore.sg or +65 6715 1175.

Disclaimer

This article should be used as a general guide only. No reader should act solely upon any information found in this article. We recommend that professional advice be sought before taking action on specific issues and making significant business decisions. RSM SG Assurance LLP (“RSM Singapore”) expressly disclaims all and any liability to any person in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of the above article. While every effort has been made to ensure the accuracy of the information contained herein, RSM Singapore shall not be responsible whatsoever for any errors or omissions in it.

Company A is incorporated and tax resident in Country X, outside Singapore. Company C and Company D are incorporated and tax resident in Country Y, outside Singapore. The Singapore branch of Company A (SG Branch) will take over the economic ownership of the shares in Company C and Company D from another branch of Company A outside Singapore. Subsequently, Company C and Company D will pay dividends to SG Branch.

The subject of the ruling is whether the repatriation of SG Branch’s branch profits to Company A using funds from foreign-sourced dividends from Company C and Company D would make these dividends permanently unavailable for subsequent remittance into Singapore by SG Branch under s 10(25) of the Income Tax Act 1947.

Source: Advance Ruling (Income Tax) Summary No. 1/2026, IRAS website, 2 January 2026, accessed 2 January 2026.

The Inland Revenue Authority of Singapore (IRAS) has published on its website the indicative margin for related party loans obtained or provided during the period from 1 January 2026 to 31 December 2026. The indicative margin is +180 bps (1.80%) and is referenced to Risk-Free Rates (RFRs) as the base reference rate.

Based on the Income Tax (Transfer Pricing Documentation) Rules 2018, the parties to the loan must agree to apply the indicative margin for the year in which the loan is granted if the following transactions are to be specifically exempt from transfer pricing documentation:

• domestic related party loans of any amount entered into on and after 1 January 2025 and where both the borrower and lender are not in the business of borrowing and lending money, or
• domestic and cross-border related party loans not exceeding $15 million.

However, the IRAS has also clarified recently in the eighth edition of the IRAS transfer pricing guidelines released on 19 November 2025 that to further reduce taxpayer’s compliance burden, the IRAS will not make transfer pricing adjustments in respect of domestic related party loans entered into or after 1 January 2025 so long that the parties to that loans are both not in the business of borrowing or lending. It follows that IRAS will not request the parties to submit TPD in relation to such loans.

Source: Transfer Pricing, IRAS website, 2 January 2026, accessed 2 January 2026

The Inland Revenue Board of Malaysia (IRBM) has updated the guideline for Real Property Gains Tax (RPGT), replacing the version dated 13 January 2025. Key changes include:

• Effective 1 January 2026, the acquirer has an additional option under s 21B of the Real Property Gains Tax Act 1976 (RPGTA) to withhold and remit an amount equivalent to the deemed assessment, provided that the disposer has informed the acquirer before the remittance. The acquirer shall select the lower of the following:
• the total monetary consideration
• the withholding rates of 3%, 5% or 7% under s 21B of the RPGTA, or
• the deemed assessment amount — this option is not available if the acquirer was not notified by the disposer in advance.
• The acquirer may be prosecuted under s 36 of the RPGTA for the following offences:
• failure to submit the Form CKHT 2A within 60 days after the acquisition date for disposals by a nominee or by an acquiring company transferring an asset into their stock in trade, or
• failure to comply with ss 27, 28(3) 28A or 28B of the RPGTA within their respective timeframes.
• The RPGT Return Forms submitted for disposals:
• year assessment (YA) 2025 onwards will be treated as a notice of assessment
• YA 2024 and prior will be processed by IRBM, and a Notice of Assessment will be issued for taxable disposals. The Certificate of Non-Chargeability will be issued for non-taxable disposals.
• Effective 1 January 2026, taxpayers may remit payment for the deemed assessment amount via instalments according to the amount and period determined by the Director General of Inland Revenue.
• The forms for applications for relief under ss 19 and 19A of the RPGTA have changed as follows:
• s 19 of the RPGTA — Form CKHT 15H
• s 19A of the RPGTA — Form CKHT 15J.
• Taxpayers may submit an appeal under ss 19 and 19A via Form RF/CKHT 15K.

The guideline is available in Bahasa Malaysia only.

Source: Operational Guidelines, Garis Panduan Operasi Cukai Keuntungan Harta Tanah, IRBM website, 17 March 2026, assessed 25 March 2026.

Income distributions by real estate investment trust units (REITs) or property trust funds (PTFs) to companies and other unit-holder entities are subjected to their respective tax rates, while individual unit-holders are subjected to the individual tax rate. This follows the cessation of the preferential REITs or PTFs withholding tax (WHT) rate of 10% effective year of assessment (YA) 2026. Deduction of WHT under s 109D of the Income Tax Act 1967 will no longer apply to resident unit-holders.

Foreign individuals and institutional investors will be taxed at 30% of chargeable income. Non-resident corporations will be taxed at 24% WHT rate.

Profit distributions from REITs or PTFs must be reported in the respective Return Forms.

Source: Practice Note No 2/2026 Explanation of tax treatment for unit holders of real estate investment trust (REIT) or property trust funds (PTF) for the year of assessment 2026 and subsequent years of assessment, IRBM website, 18 March 2026, accessed 25 March 2026.

The Inland Revenue Board of Malaysia (IRBM) has updated the public ruling on tax incentive for the Returning Expert Programme (REP), replacing Public Ruling No 2/2018 of the same title. The updated ruling includes legislative changes, additional clarifications and new example.

Among the key changes

• Application deadline for the REP has been extended to 31 December 2027.
• Clarification and example are provided for situations where an approved individual is self-employed and acts as a company director of a company that they have established.

Source: Public Ruling No 1/2026 Tax incentive for Returning Expert Programme, 16 March 2026, accessed 18 March 2026.

The Inland Revenue Board of Malaysia (IRBM) has released a Practice Note to clarify the tax treatment for unit holders receiving income distributions from Retail Money Market Fund (RMMF) unit trusts.

The format and terminology used in the profit distribution vouchers of unit trusts must be adopted by RMMFs and serve as a reference to unit holders.

RMMFs are required to declare taxable income in column (1) of the profit distribution voucher. The amount reflected would be taken as gross income of the unit trust.

The profit distributions will be regarded as taxable income under the Income Tax Act 1967 if the profit distributions of interest income received in Malaysia from local banks and financial institutions are:

• declared as taxable income and stated in column (5) of the voucher — Non-taxable income, and
• withholding tax deductions was made on the profit distribution.

Source: Practice Note No 1/2026 Explanation on tax treatment for reporting income based on profit distribution vouchers of Retail Money Market Fund (“RMMF”), IRBM website, 27 February 2026, accessed 3 March 2026.

The Labuan Financial Services Authority (LFSA) has released a Clarification Note on the income tax exemption for Islamic financial activities to clarify the definition of “digital solutions” referred to in the following Orders:

• Labuan Business Activity Tax (Exemption) Order 2024
• Labuan Business Activity Tax (Exemption) Order 2026.

“Digital solutions” refer to

• the adoption and application of advanced technology-driven tools platforms or systems (such as blockchain and artificial intelligence) to enhance the delivery, accessibility, efficiency and governance of financial services, and
• entities approved by the LFSA under the Digital Financial Services (DFS), in accordance with the Circular on Innovative Financial Services in the Labuan International Business and Financial Centre issued in 2018.

Eligible Labuan entities must substantiate their claim for the tax exemption to the Inland Revenue Board of Malaysia by providing evidence of approval under the LFSA’s DFS or other documentations demonstrating their utilisation of digital solutions.

Source: Clarification Note for income tax exemption for Islamic Financial Activities, Labuan Financial Services Authority, 27 February 2026, accessed 2 March 2026.

By Chok Wei Hong

A Structural Reset of Malaysia’s Incentive Regime

Malaysian Investment Development Authority (MIDA) has newly introduced the Guidelines of Tax Incentives for New Investment in The Manufacturing Sector under The New Incentive Framework (NIF) dated 15th January 2026 as part of a broader policy reset to strengthen the country’s investment landscape. The NIF represents a fundamental shift from the previous regime under the Promotion of Investments Act 1986, where eligibility was largely determined by whether a company’s activities fell within a prescribed promoted list.

Under the new framework, incentives are administered through the Income Tax Act 1967 and assessed using an outcome-based methodology aligned with the National Investment Aspirations and the New Industrial Master Plan 2030 to attract high-growth and high-value investments.

This is not merely an administrative update. It is a redesign of how Malaysia attracts and evaluates investment.

For manufacturing investments, the NIF takes effect from 1 March 2026. Investors planning new projects must therefore reassess how they approach incentive applications in Malaysia.

The Direct Financial Benefits

At its core, the NIF still provides meaningful tax benefits that can significantly reduce a company’s overall tax burden.

Companies may choose one of the following incentives for a qualifying project:

1. Special Tax Rate A reduced corporate income tax rate ranging from 0 percent to 10 percent for up to 15 years, depending on the investment quality and commitments made. In certain cases, the rate may differ for specific categories such as less developed areas or small companies.

2. Investment Tax Allowance (ITA) An allowance of up to 100 percent of qualifying capital expenditure incurred within an approved period of up to 15 years. The allowance may be used to offset between 70 percent to 100 percent of statutory income, effectively reducing the company’s taxable base.

Both mechanisms are designed to reduce the effective tax cost of establishing and operating in Malaysia. For capital-intensive projects, the savings can be substantial.

However, the key difference under the NIF is that these benefits are no longer automatic or purely activity-based. They are performance-based.

From Promoted Lists to Measurable Outcomes

Under the previous framework, once a company met the promoted activity criteria and satisfied prescribed conditions, the incentive structure was relatively predictable.

The NIF replaces this model with a tiered and outcome-driven approach assessed through the National Investment Aspirations (NIA) Scorecard. The scorecard evaluates the proposed investment across six strategic pillars:

• Economic complexity
• High-value job creation
• Domestic linkages
• Industrial cluster development
• Inclusivity
• Sustainability practices

The incentive quantum and tier are determined by how strongly the project contributes to these national priorities.

In practical terms, the Government is no longer rewarding the type of activity alone. It is rewarding the quality and impact of the investment.

Incentives Are Earned Annually

Another structural shift under the NIF is that approval does not equate to unconditional entitlement.

Following approval, companies must submit annual compliance reports. The tax incentive enjoyed in a particular year of assessment depends on whether the company has met the minimum conditions and, where applicable, additional conditions tied to its approved commitments.

Meeting minimum conditions entitles the company to Tier 2 benefits. Meeting both minimum and additional conditions may unlock Tier 1 benefits, which typically represent a more favourable tax outcome.

Failure to meet the required conditions may result in the company being taxed at prevailing corporate rates for that year.

The framework therefore creates an ongoing performance obligation rather than a one-time qualification exercise.

Operational Capability Now Drives Tax Outcomes

The NIF integrates tax incentives with operational performance. A company’s tax outcome may now depend on factors such as:

• The proportion of high-skilled employees
• Median salary levels
• R&D expenditure as a percentage of sales
• Level of automation and technology adoption
• Local sourcing and vendor development
• ESG and sustainability implementation

This means incentive planning cannot be treated as a standalone tax exercise. It requires alignment across finance, operations, HR, and sustainability functions.

For serious investors, this presents both a challenge and an opportunity. Companies that already operate with strong governance, technology adoption, and human capital strategies are likely to be well-positioned under the NIF framework.

Strategic Implications for Investors

For investors evaluating Malaysia as a manufacturing base from 2026 onwards, the NIF sends a clear signal.

Malaysia is prioritising high-growth, high-value, and future-ready investments. The incentive structure is designed to differentiate between projects that merely establish operations and those that materially enhance economic capability.

The financial benefits remain attractive. Reduced tax rates and capital allowances can materially improve project returns. However, the ability to sustain those benefits depends on disciplined execution and measurable performance.

Investors who approach the NIF as a strategic framework rather than a tax concession programme will be better positioned to maximise both incentive outcomes and long-term competitiveness.

Conclusion

Malaysia’s New Incentive Framework is not simply about lowering tax. It is about aligning investment with national economic transformation. For forward-looking investors, that alignment can translate into both fiscal efficiency and strategic advantage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chok Wei Hong is a licensed tax agent with extensive experience in tax advisory, dispute resolution and investment structuring. He focuses on strengthening tax governance frameworks and guiding businesses through complex regulatory and incentive landscapes

The Inland Revenue Board of Malaysia (IRBM) has released the updated technical guideline for the application for approval under s 44(6) of the Income Tax Act 1967 (ITA) for the purchase of religious school funds. The key updates include the following:

• The purchase of religious school funds must align with the definition of “fund” under s 44(7) of the ITA.
• The annual financial statement prepared for the purchase of religious school funds must be audited by the Ministry of Education or a licensed auditor and submitted to the IRBM by 30 April the following year.
• Specific wordings to be used on the official receipts stating the following:
• eligibility of the deduction under s 44(6) of the ITA
• IRBM’s approval reference number, and
• the period of approval.
• Usage of electronic receipts must be applied to IRBM through a written application.
• The implementation of e-Invoice is applicable to the purchase of religious school funds approved under s 44(6) of the ITA for donation or gift of cash.
• The purchase of religious school funds is not involved in political activities or union movements.
• The consequences of non-compliance include:
• IRBM may impose income tax for the respective years of assessment (YAs) based on tax rates according to the funds’ registered tax file
• IRBM may shorten or withdraw the approval status of the funds under s 148 of the ITA.
• The guideline applies to all approval still in force, regardless of the approval dates.
• Contributions in kind are not eligible for tax deductions.

The guideline supersedes the version issued on 28 April 2021 and is available only in Bahasa Malaysia.

Source: Technical Guidelines, Garis panduan bagi kelulusan Ketua Pengarah Hasil Dalam Negeri di bawah subseksyen 44(6) Akta Cukai Pendapatan 1967 (ACP) bagi tabung pembelian sekolah agama, IRBM website, 28 January 2026, accessed 30 January 2026.

As announced in Budget 2026, the Government will be implementing the New Incentive Framework (NIF) in phases starting with the manufacturing sector from 1 March 2026. This will be followed by the services sector in Q2 of 2026. The NIF adopts a tiered and outcome-based approach, guided by 2 key national strategies:

• National Investment Aspirations
• New Industrial Master Plan 2030.

The NIF offers 2 primary tax incentives that are mutually exclusive:

• Special Tax Rate:
• reduced corporate income tax rate for a specified period
• accumulated losses incurred can be carried forward for 7 consecutive years and be deducted from company’s post-incentive income.
• Investment Tax Allowance:
• offsetting a percentage of the qualifying capital expenditure against the statutory income within a specified period
• unutilised allowance can be carried forward to subsequent years until fully utilised.

Applicants are required to select one of the incentives for their qualifying project and submit the online application via the Invest Malaysia Portal on the Malaysian Investment Development Authority (MIDA) website from 1 March 2026.

New incentive applications for the manufacturing sector under the Promotion of Investments Act 1986 (PIA 1986) will not be accepted after 3pm on 28 February 2026. Submissions made before 1 March 2026 and are still under MIDA’s review will be assessed under the existing incentive framework. Existing approvals will not be affected and shall remain valid under their current terms and conditions. Meanwhile, the deadline for submission of applications under PIA 1986 for services sector will be announced in due course.

MIDA has released the Guidelines for manufacturing sector under the NIF and the Frequently Asked Questions about NIF on their website.

Source: New Incentive Framework (NIF), media release; Guidelines of tax incentives for new investment in the manufacturing sector under the New Incentive Framework (NIF); Frequently Asked Question about New Incentive Framework – NIF, MIDA website; New Incentive Framework – NIF, Ministry of Investment, Trade and Industry website, 29 January 2026, accessed 30 January 2026.

The Inland Revenue Board of Malaysia (IRBM) has launched the Special Voluntary Disclosure Programme (SVDP) for Stamp Duty from 1 January 2026 to 30 June 2026, in line with the recent announcement made by the Prime Minister. The SVDP for Stamp Duty applies to all instruments executed between 1 January 2023 to 31 December 2025. Stamping and payment of stamp duty must be made within the SVDP period with penalties exempted.

The IRBM has released the Operational Guidelines and Frequently Asked Questions (FAQs) to guide the duty payers on the SVDP for Stamp Duty. Among others, the Guidelines and FAQs include:

• Penalties will be automatically waived when stamp duty is paid, and duty payers are not required to apply for remission of penalties.
• The SVDP for Stamp Duty does not apply to cases with elements of fraud.
• Instruments executed between 1 January 2023 to 31 December 2025 and stamped during the SVDP period will not be audited.
• The SVDP for Stamp Duty does not prevent an audit on instruments outside the SVDP period.
• Duty payers must submit their instruments for stamping under the SVDP via the e-Duti Setem portal.

The Guidelines and FAQs are available in Bahasa Malaysia only.

Source: Program Khas Pengakuan Sukarela (PKPS) Duti Setem 2026, media release; Layanan khas penalti di bawah seksyen 47A Akta Setem 1949 bagi Program Khas Pengakuan Sukarela Duti Setem 2026, Operational Guidelines; Soalan lazim (FAQ) pengecualian penalti Program Khas Pengakuan Sukarela (PKPS) Duti Setem 2026, IRBM website, 28 January 2026, accessed 29 January 2026.

Qualifying Labuan takaful business activities and Labuan takaful related activities have been gazetted as part of the qualifying Islamic finance activities eligible for full income tax exemption for the years of assessment (YAs) 2025 to 2028. This was announced in the 2025 Budget.

Currently, Labuan trading entities involved in certain Islamic finance activities are already eligible for full income tax exemption for YAs 2024 to 2028, covering activities such as:

• Islamic digital banking
• Islamic digital bourses
• ummah-related companies
• Islamic digital token issuers.

Source: Labuan Business Activity Tax (Exemption) Order 2026, Federal Government Gazette, 26 January 2026, accessed 27 January 2026.

The Inland Revenue Board of Malaysia has released a guideline explaining the tax treatment of income received by social and digital media influencers. The guideline clarifies the following:

• Categories of social media influencers:
• individual influencers
• object-based influencers — including animated characters, acting characters or characters created and registered on any social media platform.
• Types of income received by the social media influencers:
• direct payments from social media platforms
• payment as product ambassador on social media
• sales of own branded goods or services
• receipts from sale of influencers’ social media accounts or IDs
• royalties from characters on social media
• other payments received through various methods including non-cash payments.
• Scope of taxation:
• Income received by Malaysia tax resident influencers shall be taxed in the relevant year of assessment as business income and is deemed to be derived from Malaysia, as the operations or activities are carried out in Malaysia.
• Income received from overseas social media operators, as well as income from activities carried out by influencers outside Malaysia shall be taxed in Malaysia regardless of whether payment is made in Malaysia or overseas.
• Tax treatment and allowable expenses:
• Income received by individual influencers and owners of object-based influencers shall be taxed under s 4(a) of the Income Tax Act 1967 (ITA).
• Expenses incurred in the production of gross income shall be claimable under s 33(1) of the ITA.
• Expenses disallowed under s 39 of the ITA, including those that are personal or capital in nature, are not claimable.
• Taxpayers' responsibilities:
• Compliance with the Notice of Instalment Payment (CP500) under s 107B of the ITA.
• Record keeping for audit purposes.

Source: Technical Guidelines, Guidelines for tax treatment on income of social media influencer, 14 January 2026, accessed 19 January 2026.

The Inland Revenue Board of Malaysia (IRBM) has announced the following updates on e-Invoice implementation:

• Taxpayers under Phase 4 of the e-Invoice implementation will be granted a 12-month transitional period from 1 January 2026 to 31 December 2026 instead of the previously announced 6-month period.
• Taxpayers in the wholesale and retail construction materials industry are now allowed to issue consolidated e-Invoices effective 1 January 2026.

Following the announcement, IRBM has updated the following documents:

• e-Invoice Specific Guideline
• implementation of e-Invoice in Malaysia Frequently Asked Questions (FAQs)
• implementation of e-Invoice in Malaysia Frequently Asked Questions (FAQs) for construction industry.

The key highlights as follows

• During the transitional period, IRBM will not impose penalties provided taxpayers comply with the following conditions:
• issuing consolidated e-Invoices for all activities and transactions, including those listed under section 3.7 of the e-Invoice Specific Guideline and to buyers or suppliers who specifically request an individual e-Invoice or individual self-billed e-Invoice
• issuing consolidated self-billed e-Invoices for all transactions outlined under section 8.3 of the e-Invoice Specific Guideline, and
• inputting any information or details of the transaction in the “Description of product or services” field of the consolidated e-Invoice or consolidated self-billed e-Invoice.
• Taxpayers in the wholesale and retail of construction materials industry are only required to issue individual e-Invoices for:
• transactions exceeding RM10,000, or
• transactions where an individual e-Invoice is specifically requested by the buyer.

Source: Tempoh peralihan tambahan pelaksanaan e-Invois fasa 4 dan kelonggaran pengeluaran e-Invois disatukan bagi perniagaan bahan binaan (media release); e-Invoice Specific Guideline Version 4.6; Implementation of e-Invoice in Malaysia Frequently Asked Questions (FAQs); Implementation of e-Invoice in Malaysia Frequently Asked Questions (FAQs) for construction industry, IRBM website, 5 and 6 January 2026, accessed 7 January 2026.

The Inland Revenue Board of Malaysia (IRBM) has updated the guideline on stamp duty for instruments of sale and transfer of movable properties. The updates include clarifications and examples to guide duty payers in determining whether movable properties are assets or trading stock. This determination must be made from the perspective of the transferor and not based on the usage or the transferee’s classification of the movable property, even though stamp duty is paid by the transferee.

The guideline version dated 29 December 2025 supersedes the version dated 6 November 2025. The guideline is available in Bahasa Malaysia only.

Source: Technical Guidelines, Garis Panduan pengenaan duti setem ke atas surat cara jual beli dan surat cara pindah milik bagi harta alih, IRBM website, 29 December 2025, 7 January 2026.

The Inland Revenue Board of Malaysia (IRBM) has updated the general guideline on stamp duty under the Stamp Act 1949 (SA) for the reference of duty payers. The version dated 29 December 2025 supersedes the version dated 6 November 2025 and includes additional clarifications and examples for duty calculations.

Among the key changes

• Section 4(1) of the SA applies regardless of the number of parties signing the instrument, including instruments signed by a single party, as long the instrument creates or has a legal effect as provided under the First sch of the SA.
• Stamp duties are determined by the content and legal effect of the document and not by their title.
• Parties involved in transactions that require multiple instruments may determine the principal instrument to be subjected to the prescribed duty. Other instruments used to complete the transaction will be imposed a RM10 duty fee each.
• Clarification on the duty payer for the respective instruments under Third sch of SA.

The guideline is available in Bahasa Malaysia only.

Source: Technical Guidelines, Pengenalan duti setem di bawah Akta Setem 1949, IRBM website, 29 December 2025, 7 January 2026.

Individuals who received the Notice of Instalment Payments (CP500) for the year of assessment (YA) 2026 will not be subject to penalties. This is in line with the Government’s decision to allow a transitional period for individual taxpayers receiving employment and non-employment income such as rental, interest and royalty income in compliance with CP500 for YA 2026.

During the transitional period, no penalties will be imposed if the individual taxpayer does not remit the CP500 instalments. Taxpayers are advised to update their income reporting via the tax return forms for YA 2025.

Taxpayers are allowed to amend the CP500 amount based on the estimated income and tax payable for YA 2026 via the Application Form for Amendment of Instalment Payment (CP502). The first amendment must be made no later than 30 June 2026 and second amendment by 31 October 2026.

Source: Konsesi pengenaan penalti ke atas notis bayaran ansuran (CP500) bagi individu yang menerima pendapatan penggajian, media release, IRBM website, 5 January 2026, accessed 7 January 2026.

Following the Real Property Gains Tax Act 1976 (RPGTA) amendment on the Measures For The Collection, Administration and Enforcement of Tax Act 2025, the Inland Revenue Board of Malaysia (IRBM) has released the prescribed form to forward the relief application to the Special Commissioners Of Income Tax (SCIT) under the RPGTA. The Measures For The Collection, Administration and Enforcement of Tax Act 2025 amends s 19A(5)(a) of the RPGTA that now requires that the application to be made in a prescribed form (Form CKHT 15K – 1/2026). The form is available only in Bahasa Malaysia.

Previously, the application was to be made in writing without a specific form.

Source: Amendment to request form to forward the relief application to the Special Commissioners Of Income Tax under Real Property Gains Tax Act 1976 (Relief request) - Form RF, IRBM Announcement, IRBM website, 1 January 2026, 2 January 2026.

Effective 1 November 2025, taxpayers are required to use the e-Lanjutan Masa on the MyTax portal to submit their application for extension of time for return forms submission.

The categories of taxpayers allowed to use e-Lanjutan Masa:

• companies
• limited liability partnership
• co-operative societies
• trust bodies
• unit trusts/property trusts
• real estate investment trusts/property trust funds
• business trusts
• chargeable person under s 30 of the Petroleum (Income Tax) Act 1967 (Production)
• chargeable person under s 30A of the Petroleum (Income Tax) Act 1967 (Exploration).

Among others, the guideline includes

• conditions to submit the applications
• codes indicating the status of applications
• appeals process
• taxpayers’ responsibilities once approval obtained.

The guideline is available only in Bahasa Malaysia.

Source: Operational Guidelines, Prosedur permohonan dan kelulusan lanjutan masa pengemukaan borang nyata secara dalam talian (e-Lanjutan Masa), IRBM website, 29 December 2025, 2 January 2026.

As announced in Budget 2026, accelerated capital allowance (ACA) will be given on expenses for purchasing speed limitation devices (SLD) for heavy vehicles. The rates consist of:

• initial allowance — 20%
• annual allowance — 80%

The conditions to claim the ACA

• the maximum expenditure for purchasing the SLD is RM4,000 per unit
• the installation is made between 1 January 2026 to 31 December 2026 and certified by any certification body recognised by the Road Transport Department
• the installation is not a replacement to an existing SLD, and
• the installation is made to commercial vehicle manufactured before 1 January 2015 under the follow categories:
• goods vehicle — maximum gross vehicle weight of 3,500 kg, or
• public service vehicle — gross vehicle weight exceeding 5,000 kg and carrying more than 8 passengers excluding the driver.

Source: Income Tax (Accelerated Capital Allowance) (Speed Limitation Device) Rules 2025, Federal Government Gazette, 31 December 2025, accessed 2 January 2026.

The following acts has been gazetted on 31 December 2025:

• Finance Act 2025
• Measures for the Collection, Administration and Enforcement of Tax Act 2025.

The acts received the royal assent on 27 December 2025 and amends the following acts:

• Income Tax Act 1967
• Real Property Gains Tax Act 1976
• Stamp Act 1949
• Labuan Business Activity Tax Act 1990
• Petroleum (Income Tax) Act 1967

Source: Finance Act 2025; Measures for the Collection, Administration and Enforcement of Tax Act 2025, The official portal of Parliament of Malaysia, 31 December 2025, accessed 2 January 2026.

The Inland Revenue Board of Malaysia has released the return forms filing program for 2026 as reference for taxpayers filing their return forms in 2026. The deadlines and grace periods for the respective return forms are listed in the program.

Effective year of assessment (YA) 2025, Labuan entities are required to file the return form (e-LE1) electronically in line with the implementation of the Self-Assessment System. Each Labuan entity is required to file the return of profits and remit the tax payable within 7 months from the end of the accounting period. The form is available on the MyTax portal.

In addition, effective YA 2026, taxpayers under the unit trust/property trust (TC), co-operative societies (CS), trust bodies (TA) and real estate investment trusts/property trust funds (TR) categories are required to provide information and furnish the required documents under s 82B of the Income Tax Act 1967 through the Malaysian Income Tax Reporting System (MITRS).

Source: Return form (RF) filing programme for the year 2026; Program memfail borang nyata (BN) tahun 2026 kini boleh diakses di portal rasmi HASiL, media release, IRBM website, 1 January 2026, accessed 2 January 2026.