Singapore – Budget 2024

1) Corporate Income Tax (“CIT”) Rebate for the Year of Assessment (“YA”) 2024, with a CIT Rebate Cash Grant for eligible companies

To help companies manage rising costs, a CIT Rebate of 50% of tax payable will be granted for YA 2024.

Companies that have employed at least one local employee in 2023 (referred to as “local employee condition”) will receive a minimum benefit of S$2,000 in the form of a cash payout (referred to as “CIT Rebate Cash Grant”).

Companies that have met the local employee condition will automatically receive the CIT Rebate Cash Grant by 3Q 2024. The CIT Rebate, less any CIT Rebate Cash Grant received, will be automatically incorporated in companies’ tax assessments raised after they file their Form C-S/ Form C-S (Lite)/ Form C for YA 2024.

For example, Company A hired two local employees in 2023. It has a CIT assessment of S$30,000 for YA 2024. Company A will receive a S$2,000 CIT Rebate Cash Grant by 3Q 2024. It will receive another S$13,000 [(50% * S$30,000) – S$2,000] in CIT Rebate in its YA 2024 CIT assessment.

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

A company is considered to have met the local employee condition if it has made CPF contributions to at least one local (i.e., Singapore Citizen or Permanent Resident) employee, excluding shareholders who are also directors of the company, in the calendar year 2023.

2) Enhance the tax deduction for Renovation or Refurbishment (“R&R”) expenditure

To ease businesses’ compliance burden and improve the relevance of the scheme, Ministry of Finance (MOF) will introduce the following enhancements from YA 2025:

a) Expand the scope of qualifying expenditure to include designer fees or professional fees;

b) Fix the relevant three-year period for the purpose of computing the R&R expenditure cap, with the first three-year period being from YA 2025 to YA 2027. We will transition all businesses to the fixed relevant three-year period; and

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

IRAS will provide further details by 3Q 2024.

3) Extend and revise the tax incentive schemes for funds managed by Singapore-based fund managers (referred to as “Qualifying Funds”)

To continue to grow Singapore’s asset and wealth management industry, the schemes will be extended till 31 December 2029.

In addition, the following key changes will be made:

a) The section 13O scheme will be enhanced to include Limited Partnerships registered in Singapore; and

b) 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.

MAS will provide further details by 3Q 2024.

4) Tax Changes for Businesses

For an overview of tax changes and enterprise disbursements announced in the Budget 2024, please refer to: https://www.iras.gov.sg/news-events/singapore-budget/budget-2024–tax-changes-and-enterprise-disbursements