Singapore’s tax treatment of employee stock-based compensation (SBC) is at a crossroads. Companies may face a double burden when Singapore subsidiaries provide services to foreign affiliates under a cost-plus model: the Inland Revenue Authority of Singapore requires notional SBC costs to be included in the cost base (and marked up), even when no actual recharge occurs, while those same SBC expenses have historically been non-deductible for income tax. This article explores the transfer pricing implications, referencing a recent Irish case that permitted exclusion of SBC from the cost base, and considers Singapore’s tax framework and the OECD Transfer Pricing Guidelines. It also examines the deductibility of SBC expenses in Singapore, as proposed in the 2025 Budget, which introduces a new tax deduction for certain SBC-related payments. The article contextualizes the current treatment of SBC in Singapore and outlines planning and compliance strategies to address the challenges of non-deductibility and transfer pricing adjustments.