TAX CHANGES: BUSINESSES

Corporate Income Tax (“CIT”) Rebate for the Year of Assessment (“YA”) 2024

For YA 2024, CIT rebate of 50% of tax payable will be granted to help companies mitigate rising costs. 

Companies that employed at least 1 local employee in 2023 will receive minimum benefit of S$2,000 in the form of a cash payout (“CIT rebate cash grant”). This non-taxable cash grant will be automatically given to businesses by the third quarter of 2024 if the “1 local employee” condition is met.

The CIT rebate, net of CIT rebate cash grant, will be incorporated on the companies’ tax assessment upon the filing of the income tax returns for YA 2024.

The total benefit that a company can receive for CIT rebate and CIT rebate cash grant is a maximum of S$40,000.

A company is considered to have met the “1 local employee” condition if CPF contributions have been made to that employee (i.e. Singapore citizen or Permanent Resident), excluding shareholders who are also the directors of the company, during the year 2023.

Enhancement of tax deduction for Renovation or Refurbishment (“R&R”) expenditure

With the aim to help companies’ reduce compliance challenges faced and enhance the relevance of the scheme, Section 14N of the Singapore Income Tax Act (“SITA”) has been improved with effect from YA 2025 as follows:-

• The scope of qualifying expenditure has been expanded to include designer fees or professional fees;
• The relevant 3 -year period has been fixed for the purpose of determining the R&R expenditure cap, with the first 3-year period starting with YA 2025 to YA 2027; and
• To allow companies to claim R&R deduction in 1 YA, subject to the current expenditure cap.

For more information on the above, please refer to the following under “Renovation & Refurbishment Works Expenditure (Section 14N)”:-

https://www.iras.gov.sg/taxes/corporate-income-tax/income-deductions-for-companies/business-expenses/tax-treatment-of-business-expenses-(m-r)

Introduction of Refundable Investment Credit (“RIC”)

The RIC will be introduced to support businesses of up to 50% of qualifying expenditures for investments made. These credits are to be offset against any CIT payable and if unutilised, they will be refunded to the company within 4 years when the company satisfies the conditions for receiving the credits.

EDB and EnterpriseSG will release more information by 3rd quarter 2024.

Implementation of Income Inclusion Rule (“IIR”) and Domestic Top-up Tax (“DTT”) under Pillar Two of the Base Erosion and Profit Shifting (“BEPS”) 2.0 Initiative

Singapore is set to introduce the IIR and DTT which will impose a minimum effective tax rate of 15% on profits derived by businesses from financial years starting on or after 1 January 2025. This will impact multinational enterprise (“MNE”) groups with annual group revenue of 750 million euros or more in at least two of the four preceding financial years (referred to as “in-scope MNE groups”), aligning with the Pillar Two Global Anti-Base Erosion (“GloBE”) Model Rules.

The IIR will apply to in-scope MNE groups parented in Singapore, in respect of the profits of their group entities operating outside Singapore.

The DTT will be applicable to in-scope MNE groups in respect of the profits of their group entities operating within Singapore.

Extension and Revision of Tax Incentive Schemes for Funds Managed by Singapore-based Fund Managers (referred to as “Qualifying Funds”)

To further expand Singapore’s asset and wealth management sector, the schemes will be extended to 31 December 2029 and the following key changes, which will take effect from 1 January 2025, will be made:-

• Section 13O scheme will be enhanced to include Limited Partnerships registered in Singapore; and
• Economic criteria for Qualifying Funds under the Sections 13D, 13O and 13U schemes will be revised.

Details from the MAS will be provided by 3rd quarter of 2024.

Introduction of Alternative Basis of Tax for Selected Maritime Sector Incentive (“MSI”) Sub-schemes

In an effort to align Singapore’s tax regime for shipping entities with the common international practices, an alternative basis will be introduced by the Government for the following MSI sub-schemes, where qualifying income is taxed with reference to net tonnage from YA 2024:  

• MSI – Shipping Enterprise (Singapore registry if Ship)
• MSI – Approved International Shipping Enterprise
• MSI – Maritime Leasing (Ship)

The alternative basis of tax will be applicable to all qualifying ships of MSI entities that are subjected to it.

Existing tax treatment under the relevant MSI sub-schemes will continue to apply to MSI entities that are not under the alternative net tonnage basis of tax.

The Maritime and Port Authority of Singapore will release more information by 3rd quarter of 2024.

Introduction of Additional Concessionary Tax Rate (“CTR”) Tier of 10% for Finance and Treasury Centre (“FTC”) Incentive

As a part of the routine review to maintain relevance and competitiveness of the tax incentives, an additional CTR tier of 10% under the FTC incentive will be introduced, effective from 17 February 2024.

EDB will furnish details by 2nd quarter of 2024.

Introduction of additional CTR Tier of 10% for Aircraft Leasing Scheme (“ALS”)

As a part of the routine review to maintain relevance and competitiveness of the tax incentives, an additional CTR tier of 10% under the ALS for approved aircraft lessors will be introduced, effective from 17 February 2024.

EDB will furnish details by 2nd quarter of 2024.

Introduction of Additional CTR Tier of 15% for Development and Expansion Incentive (“DEI”)

As a part of the routine review to maintain relevance and competitiveness of the tax incentives, an additional CTR tier of 15% under the DEI will be introduced, effective from 17 February 2024.

EDB will furnish details by 2nd quarter of 2024.

Introduction of Additional CTR Tier of 15% for Intellectual Property Development Incentive (“IDI”)

As a part of the routine review to maintain relevance and competitiveness of the tax incentives, an additional CTR tier of 15% under the IDI will be introduced, effective from 17 February 2024.

EDB will furnish details by 2nd quarter of 2024.

Introduction of Additional CTR Tier of 15% for Global Trader Programme (“GTP”)

As a part of the routine review to maintain relevance and competitiveness of the tax incentives, an additional CTR tier of 15% under the GTP will be introduced, effective from 17 February 2024.

EnterpriseSG will furnish details by 2nd quarter of 2024.

Revisions to Additional Buyer’s Stamp Duty (“ABSD”) Remission Clawback Rates for Housing Developers (“HDs”)

With effect from 16 February 2024, projects achieving at least 90% of unit sales within the five-year sale timeline will be eligible for a reduced ABSD remission clawback rate provided that the commencement and completion of works criteria are also fulfilled.

This applies for projects where the residential land was acquired on or after 6 July 2018. The ABSD remission clawed back will be reduced by 1 percentage point to 10 percentage points, depending on the proportion of units sold at the five-year mark.

TAX CHANGES: INDIVIDUALS

Personal Income Tax (“PIT”) Rebate for YA 2024

For YA 2024, PIT rebate of 50% of tax payable, capped at S$200, will be granted to all tax resident individuals to cope with rising living costs.

Increasing Income Threshold of Dependant or Caregiver for Dependant-Related Reliefs to $8,000

With the aim of allowing more taxpayers supporting dependent family members to enjoy these reliefs, while providing greater flexibility for family members to engage in some work, the income threshold of will be increased to $8,000 from S$4,000 with effect from YA 2025.

The dependant-related reliefs are:-

• Spouse Relief;
• Parent Relief;
• Qualifying Child Relief;
• Working Mother’s Child Relief;
• CPF Cash Top-up Relief for Top-up to the CPF Account of Spouse or Siblings; and
• Grandparent Caregiver Relief.

Revision of Annual Value (“AV”) Bands for Owner-occupier Residential Property Tax (“PT”) Rates from 1 January 2025 (i.e. from 2025 PT bills)

The AV bands of the owner-occupier residential PT rates will be adjusted from 1 January 2025 as follows:-

Extension of GIRO Scheme for Residential Property (Retirees) [“EGS – Residential Property (Retirees)”]

To offer retirees with greater support, the 12-month interest-free GIRO instalment plan offered by IRAS will be extended to up to 24 months, effective from PT bill 2024, for retirees who meet the following criteria:

• All owners of the property are aged 65 and above;
• The applicant must owner-occupy the residential property (i.e., live in the property they own); and
• The applicant’s assessable income must not exceed S$34,000 (based on latest tax assessment available).

With effect from 19 February 2024, eligible retirees can apply for EGS Residential Property (Retirees) via myTax Portal.

Introduction of New Additional Buyer’s Stamp Duty (“ABSD”) Concession for Single Singapore Citizen (“SC”) Seniors

To enhance the support for single SC seniors who wish to right-size their residential property (“RP”), 

the ABSD concession will be extended to single SC seniors aged 55 and above. For purchases made on or after 16 February 2024, single SC seniors aged 55 and above can claim a refund of ABSD paid on the replacement private RP if they meet the following conditions:

• ABSD has been paid on the replacement RP;
• Each first RP is solely owned by a single SC aged 55 and above, or with single SCs aged 55 and above who are immediate family members;
• The owners of each first RP need to be the owners of the replacement RP. Any additional owners purchasing the replacement RP with the owners of each first RP must also be single SCs aged 55 and above who are immediate family members. There should be no change of ownership in the replacement RP at the time of the sale of each first RP;
• The buyer(s) do not own more than one RP each at the point of purchasing the replacement RP, and have not purchased or acquired any other RP since the purchase of the replacement RP;
• The value of the replacement RP is less than the value of each of the first RP(s) sold;
• The buyer(s) dispose the first RP(s) (whether co-owned or separately owned) within six months after the date of purchase of a completed RP, or the issue date of the TOP or CSC of an uncompleted RP, whichever is earlier; and
• The application for the refund of ABSD is made within six months after the date of sale of the first RP(s).

Lapsing of Course Fees Relief (“CFR”)

The CFR will be lapsed with effect from YA 2026.

Removal of CPF Cash Top-Up Relief for Cash Top-ups that Attract Matching Grant from the Government under the Matched Retirement Savings Scheme (“MRSS”)

Due to the significant benefit already provided by the MRSS matching grant, cash top-ups made on or after 1 January 2025 to the Retirement Account of a MRSS-eligible CPF member that attract the MRSS matching grant will no longer entitle the giver to the CPF Cash Top-Up Relief from YA 2026.

Notwithstanding the above, a giver can still benefit from tax relief of up to $16,000 annually for eligible CPF cash top-ups that do not qualify for the MRSS matching grant. The maximum CPF Cash Top-Up Relief remains at $8,000 per year for cash top-ups to the giver’s own Special Account, Retirement Account or MediSave Account, and another $8,000 per year for cash top-ups to such accounts of the giver’s loved ones.

This change will be accompanied by enhancements to the MRSS.

TAX CHANGES: OTHERS

Introduction of Overseas Humanitarian Assistance Tax Deduction Scheme (“OHAS”)

To promote contributions towards overseas emergency humanitarian assistance efforts, the OHAS will undergo a four-year pilot phase from 1 January 2025 to 31 December 2028.

The OHAS will provide individual and corporate donors with 100% tax deduction for qualifying overseas cash donations made through a designated charity and towards a fundraiser for emergency humanitarian assistance with a valid Fund-Raising for Foreign Charitable Purposes permit from the Commissioner of Charities.

Withdrawal of Income Tax Concession on Royalty Income Accorded to Authors, Composers and Choreographers

To ensure parity in the treatment of royalty income, the existing tax concession, which taxes only 10% of gross royalties, will be gradually phased out starting from YA 2027. 

For YA 2027 and YA 2028, eligible taxpayers may continue to claim the tax concession and report their taxable royalty income based on the lower of (i) the net amount of royalties (i.e., gross amount of royalties, less allowable deductions and capital allowances), and (ii) a specified rate applied on the gross amount of royalties. The specified rate will be as follows:

The tax concession will lapse after YA 2028. From YA 2029, taxpayers should report the net amount of royalties.