Proposed Singapore plans to implement the GloBE rules and DTT from businesses’ financial year starting on or after 1 January 2025. The Government will continue to monitor international developments and adjust the implementation timeline as needed if there are delays internationally.
Current Businesses that incur capital expenditure on the acquisition of P&M may claim capital allowance (“CA”) under Section 19 (i.e. write-off over the working life of the assets as specified in the Sixth Schedule) or Section 19A (i.e. write-off over one or three years) of the Income Tax Act (“ITA”).
Proposed Businesses that incur capital expenditure on the acquisition of P&M in the basis period for Year of Assessment (“YA”) 2024 (i.e. financial year ending in 2023) will have an option to accelerate the write-off of the cost of acquiring such P&M over two years. This option, if exercised, is irrevocable. The rates of accelerated CA allowed are as follows:
The above option will be in addition to the options currently available under Sections 19 and 19A of the ITA.
No deferment of CA claims is allowed under the above option.
Current Under Section 14N of the ITA, businesses that incur qualifying expenditure on R&R may claim tax deduction on such expenditure over three consecutive YAs on a straight-line basis, starting from the YA relating to the basis period in which the R&R expenditure is incurred. A cap of $300,000 for every relevant period of the three consecutive YAs applies.
Proposed Businesses that incur qualifying expenditure on R&R during the basis period for YA2024 (i.e. financial year ending in 2023) will have an option to claim R&R deduction in one YA. The cap of $300,000 for every relevant period of three consecutive YAs will still apply.
This option, if exercised, is irrevocable. This option will be in addition to the existing option currently available under Section 14N of the ITA.
Current Donors are eligible for a 250% tax deduction for qualifying donations made to IPCs and other eligible institutions from 1 January 2016 to 31 December 2023.
Proposed The 250% tax deduction will be extended to qualifying donations made from 1 January 2024 to 31 December 2026.
Current Currently, businesses enjoy a 100% tax deduction for all qualifying R&D expenditure incurred on qualifying R&D projects, and an additional 150% tax deduction for staff costs and consumables incurred on qualifying R&D projects conducted in Singapore.
Proposed Under the EIS, an enhanced tax deduction will be provided for businesses to enjoy a 400% tax deduction for the first S$400,000 of staff costs and consumables incurred on qualifying R&D projects conducted in Singapore for each YA from YA2024 to YA2028.
All other existing eligibility criteria and conditions for tax deductions on staff costs and consumables incurred on qualifying R&D projects conducted in Singapore are applicable to the enhancement.
Current Currently, businesses enjoy a 200% tax deduction on the first S$100,000 of qualifying IP registration costs on registration of patents, trademarks, designs, and plant varieties. Subsequent qualifying IP registration costs can enjoy a 100% tax deduction.
Proposed Under the EIS, an enhanced tax deduction will be provided to allow businesses to enjoy a 400% tax deduction for the first S$400,000 of qualifying IP registration costs incurred for each YA from YA2024 to YA2028. All other existing eligibility criteria and conditions for tax deductions on qualifying IP registration costs are applicable to the enhancement.
Current Currently, businesses can enjoy a 100% writing-down allowance (“WDA”) over a period of 5, 10 or 15 years on acquisition costs of qualifying IP rights.
For qualifying IP rights licensing expenditure, businesses can enjoy a 200% tax deduction on the first S$100,000 of qualifying expenditure, and a 100% tax deduction on subsequent expenditure.
Proposed Under the EIS, businesses will enjoy tax allowances/deductions of 400% for the first S$400,000 of qualifying expenditure incurred on the acquisition and licensing of qualifying IP rights for each YA from YA2024 to YA2028. The expenditure cap of S$400,000 is applied across IP rights acquisition and licensing collectively.
The enhancement will only be available to businesses that generate less than S$500 million in revenue in the relevant YA.
All other existing eligibility criteria and conditions for tax allowances/deductions on acquisition and licensing of qualifying IP rights are applicable to the enhancement.
Current Currently, businesses can claim a 100% tax deduction on training expenditure as a deductible business expense.
Proposed Under the EIS, businesses will enjoy a tax deduction of 400% for the first S$400,000 of qualifying training expenditure incurred for each YA from YA2024 to YA2028.
The enhancement is only applicable to qualifying training expenditure incurred on courses that are eligible for SkillsFuture Singapore funding and aligned with the Skills Framework.
All other existing eligibility criteria and conditions for tax deductions on training expenditure are applicable to the enhancement.
Proposed Under the EIS, the Government will introduce a new tax deduction where businesses can claim a 400% tax deduction for up to S$50,000 of qualifying innovation expenditures incurred on qualifying innovation projects carried out with partner institutions for each YA from YA2024 to YA2028.
The current list of partner institutions include:
Qualifying innovation projects with partner institutions refer to projects that predominantly involve one or more of the following innovation activities:
The relevant partner institutions will validate the project as a qualifying innovation project and issue the innovation project invoice. Expenditure incurred outside of the collaboration with the partner institution will not qualify for this tax deduction.
For the above qualifying activities, eligible businesses can opt for a non-taxable cash payout at a cash conversion ratio of 20% on up to S$100,000 of total qualifying expenditure each YA, in lieu of tax deductions or allowances. The cash payout will be capped at S$20,000 for each YA. Applications for the cash payout are to be submitted together with the filing of the businesses’ income tax returns.
Eligible businesses refer to companies, registered business trusts, partnerships and sole-proprietorships with at least three full-time local employees (Singapore Citizens or Permanent Residents who are paid Central Provident Fund (“CPF”) contributions) earning a gross monthly salary of at least S$1,400, in employment for six months or more, in the basis period of the relevant YA.
The sunset dates for Section 14A (Deduction for costs of protecting IP), Section 14C (Deduction for qualifying expenditure on R&D), Section 14D (Enhanced deduction for qualifying expenditure on R&D), Section 14U (Enhanced deduction for expenditure on licensing IP rights) and Section 19B (WDA for capital expenditure on acquiring IP rights) of the ITA will be extended till YA2028, in line with the above enhancements under EIS.
Current Under the DTDi scheme, businesses are allowed a tax deduction of 200% on qualifying market expansion and investment development expenses, subject to prior approval from Enterprise Singapore ("EnterpriseSG") or Singapore Tourism Board ("STB"). The DTDi scheme is in place until 31 December 2025.
Proposed The scope of the DTDi scheme will be enhanced to include a new qualifying activity “e-commerce campaign” and covers the following e-commerce campaign startup expenses paid to e-commerce platform/service providers:
Prior approval is required from EnterpriseSG to enjoy DTDi on the new qualifying activity. For each business, EnterpriseSG will only approve DTDi support for e-commerce campaigns for a maximum period of one year applied on a per-country basis.
The above enhancement will take effect for qualifying e-commerce campaign startup expenses incurred on or after 15 February 2023.
Current The IA scheme provides an additional tax allowance for businesses which incur qualifying fixed capital expenditure on approved projects. This is calculated as a percentage of the amount of capital expenditure incurred, net of grants, on an approved project. The IA scheme is scheduled to lapse after 31 December 2023.
Proposed The IA scheme will be extended till 31 December 2028.
Current Businesses can enjoy 100% IA support on the amount of approved capital expenditure, net of grants, for automation projects approved by EnterpriseSG. The IA-100% scheme is scheduled to lapse after 31 March 2023.
Proposed The IA-100% scheme will be extended till 31 March 2026, with the same parameters.
Current
The PC and DEI are scheduled to lapse after 31 December 2023.
Proposed The PC and DEI will be extended till 31 December 2028.
Current Under the IDI, recipients are eligible for concessionary tax rates of 5% or 10% on a percentage of qualifying IP income.
The IDI is scheduled to lapse after 31 December 2023.
Proposed The IDI will be extended till 31 December 2028.
Current A qualifying person can, subject to conditions, enjoy a total of 250% tax deduction on qualifying expenditure such as wages incurred by the person from 1 July 2016 to 31 December 2023 in respect of –
There is a cap on qualifying expenditure of S$250,000 per business per YA and S$50,000 per IPC per calendar year.
Proposed The following changes are proposed to the CVS:
The above enhancements will take effect from 1 January 2024.
All other conditions of the scheme remain the same.
Current Currently, there are three tax measures relating to submarine cable systems:
Proposed All three tax measures above will be extended till 31 December 2028, with the same parameters.
Current The ASPV scheme grants the following tax concessions to an ASPV engaged in asset securitisation transactions:
The ASPV scheme is scheduled to lapse after 31 December 2023.
Proposed The ASPV scheme will be extended till 31 December 2028.
Instead of a fixed rate of 76%, the GST recovery rate will be the prevailing GST recovery rate/methodology accorded to licensed full banks under Monetary Authority of Singapore (“MAS”) for the specific year in question.
All other tax concessions and conditions of the ASPV scheme remain the same.
Further, a new sub-scheme named ASPV (Covered Bonds) will be introduced for the special purpose vehicle holding the “cover pool” in relation to the covered bonds as defined in MAS Notice 648.
The ASPV (Covered Bonds) scheme will take effect from 15 February 2023 to 31 December 2028 and will be administered by MAS. MAS will provide further details by 31 May 2023.
Current The FSI scheme accords concessionary tax rates of 5%, 10%, 12% and 13.5% on income from qualifying banking and financial activities, headquarters and corporate services, fund managing and investment advisory services. The FSI scheme is scheduled to lapse after 31 December 2023.
Proposed The FSI scheme will be extended and refined as follows:
MAS will provide further details of the changes by 31 May 2023.
Under the FSI-Headquarter Services, WHT exemption is granted on interest payments made to qualifying non-residents during the award tenure on qualifying loans. The WHT exemption will similarly be extended till 31 December 2028.
Current The QDS scheme offers the following tax concessions on qualifying income from QDS:
a) 10% concessionary tax rate for qualifying companies and bodies of persons in Singapore; and