Insights
posted on February 21, 2024

Deputy Prime Minister and Minister for Finance, Mr Lawrence Wong, delivered Singapore’s FY2024 Budget Statement on 16 February 2024, Friday.

Read RT’s summary of the key takeaways on the Singapore Budget 2024.

SUPPORTING BUSINESSES AND DRIVING GROWTH

Tax changes for businesses

Implementation of the Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) under Pillar 2 of the BEPS 2.0 initiative

Starting from 1 January 2025, Singapore will implement IIR and DTT, which will impose a minimum effective tax rate of 15% on businesses’ profits.

Apply to multinational enterprise (MNE) groups with annual group revenue of €750 million or more in at least 2 of the 4 preceding financial years (in-scope MNE groups).

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

DTT will apply to in-scope MNE groups in respect of the profits of their group entities that are operating in Singapore.

Corporate Income Tax (CIT) Rebate and Cash Grant for Year of Assessment (YA) 2024

Companies will receive a 50% Corporate Income Tax Rebate, capped at $40,000, for YA 2024.

Companies with at least 1 local employee in 2023 will receive $2,000 cash payout (CIT Rebate Cash Payout) by Q3 2024.

The CIT Rebate Cash Payout is not taxable.

Maximum total benefits of CIT Rebate and CIT Rebate Cash Grant that a company may receive is $40,000.

Enhancement on tax deduction for Renovation or Refurbishment (R&R) expenditure

Expand the scope of qualifying expenditure to include designer or professional fees.

Fix the relevant three-year period for the purpose of computing the R&R expenditure cap, with the first period starting from YA 2025 to YA 2027.

Allow an option to claim R&R deductions in one YA, subject to prevailing expenditure cap.

Introduction of Refundable Investment Credit (RIC)

To attract more investments into Singapore, RIC will be introduced to support up to 50% of qualifying expenditures.

The credits are to be offset against the company’s corporate income tax payables.

Any unutilised tax credits will be refunded to the company as cash within 4 years from when the company satisfies the conditions for receiving the credits.

EDB and Enterprise SG will provide further details by 30 September 2024.

New Concessionary Tax Rate (CTR) Tier for various tax incentives

With effect from 17 February 2024

Additional CTR tier of 10% for:

  • Finance and Treasury Centre incentive
  • Aircraft Leasing Scheme

Addition CTR tier of 15% for:

  • Development and Expansion Incentive
  • Intellectual Property Development Incentive
  • Global Trader Programme

EDB and Enterprise SG will provide further details by 30 June 2024.

Extension and revision for tax incentive schemes for funds managed by Singapore-based fund managers (Qualifying Funds)

Fund tax incentive schemes under Sections 13D,13O and 13U, as well as withholding tax exemptions and GST remission for such qualifying funds have been extended till 31 December 2029.

The Section 13O scheme will be enhanced to include Limited Partnerships registered in Singapore.

The economic criteria for Qualifying Funds under the Sections 13D,13O and 13U schemes will be revised.

These key changes will take effect from 1 January 2025.

 

INVESTING IN OUR PEOPLE

Support for Workers and Businesses

Personal Income Tax Rebate

Personal income tax rebate of 50% of tax payable, capped at $200, will be granted to resident individuals for YA 2024.

Income threshold for depended-related tax reliefs

With effect from YA 2025, annual income threshold for dependent-related reliefs will be increased from $4,000 to $8,000 per year.

For cash top-up made from 1 January 2024 to CPF accounts for spouse/siblings/parents/grandparents, the income threshold to qualify for tax relief will be increased from $4,000 to $8,000 in Year of Assessment (YA) 2025.

CPF Transition Offset (CTO)

From 1 January 2025, CPF contribution rates for employees aged 55 to 65 will be increased by 1.5 percentage points.

The CPF Transition Offset will be provided to employers to alleviate the increase of business cost arising from the 2025 increase in senior workers’ CPF contribution rates. The offset provided will be equivalent to 50% of the 2025 increase in employer CPF contribution rates.

The CTO will be automatically granted to employers to mitigate the increased business cost.

Progressive Wage Credit Scheme (PWCS)

There will be enhancements to the Progressive Wage Credit Scheme (PWCS) to raise the PWCS co-funding levels and wage ceiling for PWCS co-funding support, as well as introduce a wage cut-off for PWCS eligibility.

  • PWCS co-funding support will be raised for wage increases given in the qualifying year 2024 from 30% to 50% for employees with gross monthly wages of up to $2,500, and 15% to 30% for employees with gross monthly wages more than $2,500 and up to $3,000.
  • The gross monthly wage ceiling for PWCS co-funding will be increased from $2,500 to $3,000 in qualifying years 2025 and 2026.
  • From 2024 onwards, PWCS support will not be applicable to employees whose average monthly wage exceeds $4,000 post-wage increase.

 

Lapse of Course fee relief from YA 2026

From YA 2026, individuals will no longer claim a tax relief of up to $5,500 for courses, seminars or conferences that are relevant to their present or future trade, business, profession, vocation or employment.

 

CONTACT US

If have any queries or require further support, please feel free to contact RT at Tax@RTASEAN.COM.

 

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