PERSONAL TAX

1. Extend the withholding tax exemption for non-resident mediators

The withholding tax exemption will be extended until 31 March 2022.

 

2. Extend the withholding tax exemption for non-resident arbitrators

The withholding tax exemption will be extended until 31 March 2022.

 

3. Allow the concessionary withholding tax rate for non-resident public entertainers (“NRPEs”) to lapse

The concessionary withholding tax rate of 10% will be extended till 31 March 2022. It will then lapse after 31 March 2022.

 

4. Allow the Angel Investors Tax Deduction (“AITD”) scheme to lapse

The AITD scheme will lapse after 31 March 2020. With the lapsing of AITD, Singapore-based startups can access funding through other government schemes such as the Startup SG programme.

 

Angel investors, whose approved angel investor status commences on or before  31 March 2020, can continue to be granted the tax deduction under the AITD scheme in respect of qualifying investments made during the period of his approved angel investor status, subject to existing conditions of the AITD scheme.

 

FOR ALL BUSINESS

1. Jobs Support Scheme (“JSS”)

All active employers, with the exception of Government organisations (local and foreign) and representative offices, are eligible for the JSS.

 

Employers will receive an 8% cash grant on the gross monthly wages of each local employee (applicable to Singapore Citizens and Permanent Residents only) for the months of October 2019 to December 2019, subject to a monthly wage cap of $3,600 per employee.

 

Employers do not need to apply for the JSS. The grant will be computed based on CPF contribution data.
Wages paid to business owners will not be eligible for the grant.

 

2. Enhancement to Wage Credit Scheme (“WCS”)

The monthly wage ceiling will be raised from $4,000 to $5,000 for qualifying wage increases given in 2019 and 2020. Government co-funding levels will also be raised for 2019 and 2020 qualifying wage increases by five percentage points, to 20% and 15% respectively.

 

3. Corporate Income Tax (“CIT”) Rebate

CIT Rebate of 25% of tax payable, capped at $15,000, will be granted for Year of Assessment (“YA”) 2020.

 

4. Automatic extension of interest-free instalments of 2 months for payment of CIT on Estimated Chargeable Income (“ECI”) filed within 3 months from the companies’ financial year-end (“FYE”)

Companies paying their CIT by GIRO can automatically enjoy an additional 2 months of interest-free instalments, when they file their ECI within 3 months from their FYE. This automatic extension of instalment plan by 2 months will apply to:

 

  1. Companies that file their ECI from 19 February 2020 to 31 December 2020 Companies that file their ECI before 19 February 2020; and
  2. Companies that file their ECI before 19 February 2020, and have ongoing instalment payments to be made in March 2020.

 

5. Increase the number of YAs for which the current year unabsorbed capital allowances (“CA”) and trade losses for a YA (collectively referred to as “qualifying deductions”) may be carried back

Under the enhanced carry-back relief scheme for YA2020, qualifying deductions for YA2020 may be carried back up to 3 immediate preceding YAs, capped at $100,000 of qualifying deductions and subject to conditions. Taxpayers may elect to carry back to the relevant preceding YAs an estimated amount of qualifying deductions available for YA2020, before the actual filing of their income tax returns for YA2020.

6. Provide an option to accelerate the write-off of the cost of acquiring plant and machinery (“P&M”)

A taxpayer who incurs capital expenditure on the acquisition of P&M in the basis period for YA2021 will have an option to accelerate the write-off of the cost of acquiring such P&M over 2 years. If exercised, this option is irrevocable. The rates of accelerated CA allowed are as follows: a) 75% of the cost incurred to be written off in the first year (i.e. YA2021); and, b) 25% of the cost incurred to be written off in the second year (i.e. YA2022).

 

7. Provide an option to accelerate the deduction of expenses incurred on renovation and refurbishment (“R&R”) – Section 14Q

Qualifying expenditure on R&R during the basis period for YA2021 for the purposes of its trade, profession or business will have an option to claim R&R deduction in 1 YA. The cap of $300,000 for every relevant period of 3 consecutive YAs will still apply.

 

8. Extend and enhance the Double Tax Deduction for Internationalisation (“DTDi”) scheme

The DTDi scheme will be extended till 31 December 2025. In addition, the scope of the DTDi scheme will be enhanced to cover the following:

 

  1. Third-party consultancy costs relating to new overseas business development to identify suitable talent and build up business network; and
  2. New categories of expenses incurred for overseas business missions (i.e. fees incurred on speaking spots to pitch products/services at overseas business and trade conferences, transporting materials/samples used during the business missions, and third-party consultancy costs to arrange business networking events to promote products/services).

 

The expanded scope will take effect from 1 April 2020.

 

9. Provide an option to accelerate the deduction of expenses incurred on renovation and refurbishment (“R&R”) – Section 14Q

Qualifying expenditure on R&R during the basis period for YA2021 for the purposes of its trade, profession or business will have an option to claim R&R deduction in 1 YA. The cap of $300,000 for every relevant period of 3 consecutive YAs will still apply.

 

10. Extend and refine the upfront certainty of non-taxation of companies’ gains on disposal of ordinary shares – Section 13Z

Section 13Z will be extended to cover disposals of ordinary shares by companies from 1 June 2022 to 31 December 2027.

In addition, to ensure consistency in the tax treatment for property-related businesses, the scheme will not apply to disposals of unlisted shares in an investee company that is in the business of trading, holding or developing immovable properties in Singapore or abroad. The change will apply to shares disposed on or after 1 June 2022.

All other conditions and exclusions of the scheme remain the same.

 

11. Streamline the number of years of working life of P&M for CA claims under Section 19 and the Sixth Schedule of the ITA

To simplify CA claims under Section 19 of the ITA, the prescribed working life of P&M in the Sixth Schedule will be streamlined. Businesses claiming annual allowance under Section 19 of the ITA may make an irrevocable election to write down their P&M as follows:

 

  1. If the current prescribed working life of the P&M in the Sixth Schedule is 12 years or less, businesses may choose to claim annual allowance over 6 or 12 years; or
  2. If the current prescribed working life of the P&M in the Sixth Schedule is 16 years, businesses may choose to claim annual allowance over 6, 12 or 16 years.

 

The above will apply for P&M acquired in or after FY2022, and in cases where P&M were purchased prior to FY2022 and no claim for CA (both initial and annual allowances) has been made (i.e. the claim for CA in respect of the entire cost of the P&M has been deferred).