Singapore – Budget 2026

Singapore Budget 2026: Key Tax, CPF, and Compliance Measures That Businesses Need to Know

Singapore Budget 2026 introduces a comprehensive package of tax, workforce, and innovation-related measures designed to help businesses manage rising costs, strengthen competitiveness, and accelerate transformation. For companies operating in today’s fast-evolving economic environment, these changes have direct implications for Corporate Income Tax (CIT) compliance, payroll and CPF management, accounting, and incentive claim processes.

This article highlights the Budget 2026 developments most relevant to business owners, finance teams, and compliance professionals and how our firm can support you in meeting the new requirements smoothly.

 

1. Corporate Income Tax Rebate and Cash Grant for YA 2026

To support businesses amid cost pressures, the Government introduced a 40% Corporate Income Tax (CIT) Rebate for YA 2026.

Key features include:

  • 40% rebate on tax payable for all companies
  • Minimum benefit of $1,500 for companies with at least one local employee in 2025
  • Combined cap of $30,000 for the CIT rebate and Cash Grant
  • Cash Grant applies only to companies employing at least one local employee (excluding shareholder-directors)

Eligible companies will receive their benefits automatically from 2Q 2026.

We will assist our clients in identifying and applying the appropriate tax incentives, reliefs, claims, deductions, exemptions, and the relevant carry-forward and carry-back provisions.

 

2. Internationalisation Support: Enhancements to MRA and DTDi

Budget 2026 strengthens support for global expansion and this is the key for businesses looking to diversify markets.

 

2.1. Enhanced Market Readiness Assistance (MRA) Grant

Effective 1 April 2026, the following enhancements will kick in:

  • Funding support increased from 50% to 70% (until 31 March 2029)
  • Grant cap remains at $100,000 per company per new market
  • From 2H 2026, companies can claim MRA support for activities in existing overseas markets, not just new ones

Companies expanding overseas will need:

  • Proper tracking of eligible expenses
  • Supporting documentation for claims
  • Alignment of accounting records with Enterprise Singapore requirements

We will assist our clients in structuring cost tracking with precise GL coding to ensure eligible expenses are clearly identifiable. While MRA Grant submissions must be made through the Business Grants Portal, we provide accurate accounting information to support a smooth application process.

 

2.2. Enhanced Double Tax Deduction for Internationalisation (DTDi)

From YA 2027, businesses will enjoy broader and more accessible DTDi benefits:

Key Enhancements

  • Automatic claim cap increased from $150,000 to $400,000 per YA
  • More activities can be claimed without prior approval, including:
    • Overseas market development trips
    • Overseas investment study trips
    • Feasibility studies
    • Overseas business development
    • Master licensing and franchising
    • Production of overseas-targeted corporate brochures

Businesses must ensure:

  • Proper classification of DTDi-eligible expenses
  • Documentation for IRAS review
  • Accurate tax reporting for YA 2027 onwards

We will assist our clients in identifying qualifying expenses and preparing fully compliant DTDi claim schedules. Our team proactively tracks expenses using appropriate GL accounts to ensure eligible items are clearly identifiable. Where further information is required, we work with clients to confirm the claims and obtain the necessary details, ensuring a smooth and accurate submission process.

 

3. Enterprise Innovation Scheme (EIS): Strengthened Support for Innovation and AI

To accelerate technological innovation, particularly in AI adoption, the EIS will be enhanced for YA 2027 and YA 2028.

 

3.1. Expanded Partner Institutions for Innovation Projects

Activity (e) under the EIS will now include the Sectoral AI Centre of Excellence for Manufacturing, giving businesses more avenues to run innovation projects.

 

3.2. New Category for AI-Related Expenditure

A sixth qualifying activity will be introduced:

  • 400% tax deduction/allowance
  • Capped at $50,000 per YA
  • No cash payout option for this category

Businesses exploring AI solutions, from automation to predictive analytics, can now enjoy significant tax savings.

We will assist our clients in identifying eligible activities, establishing proper documentation processes, and supporting tax filings, ensuring that all required supporting documents are maintained as records.

 

4. Payroll and CPF: Increase in Senior Worker CPF Contribution Rates (From 1 Jan 2027)

As part of long-term CPF strengthening efforts, senior worker CPF contribution rates will increase again on 1 January 2027 for employees aged above 55 to 65.

Key Changes in 2027

  • Above 55 to 60: Contribution rate increases to 35.5%
  • Above 60 to 65: Contribution rate increases to 26.0%
  • Increases are channelled fully to the Retirement Account (RA)

For employees who have set aside the Full Retirement Sum, the additional contributions will flow to the Ordinary Account (OA).

 

One-Year CPF Transition Offset

To help employers manage rising payroll costs, the Government will provide automatic offset covering 50% of the increase in employer’s CPF contribution rates. This applies throughout 2027, with no application required.

For more details on tax changes and enterprise disbursements announced in the Budget 2026, please visit Budget 2026: Tax Changes and Enterprise Disbursements

 

How We Can Support Your Business

With significant changes introduced in Budget 2026, businesses should proactively review tax planning, payroll systems, and compliance processes.

Our firm provides comprehensive support in:

  • Corporate Income Tax (CIT) filing and planning
  • GST and WHT compliance
  • Payroll processing and CPF submission
  • Accounting and financial reporting

We will assist our clients in maintaining compliance and preparing for upcoming regulatory changes. Our team is ready to provide support whenever assistance is required.