Monday, 16 March, 2015

Singapore Budget 2015 Key Highlights

We are delighted to feature for your information the Budget 2015 delivered in Parliament on 23 February 2015 by Singapore’s Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam for the financial year 1 April 2015 to 31 March 2016:

Company Tax

  • Extension of 30% Corporate Income Tax rebate up to SGD20,000 for each of the Years of Assessment 2016 and 2017 based on an entity’s profits for each of the financial years 2015 and 2016.
  • Allowing Productivity and Innovation Credit (PIC) bonus to lapse in Year of Assessment 2015 on qualifying expenditures incurred in the company’s financial year 2014.
  • Extending and enhancing the Mergers & Acquisitions (M&A) Scheme to accord M&A allowance up to SGD20 million for each assessment Year.
  • Enhancing the Double Tax Deduction (DTD) for Internationalisation Scheme to include qualifying manpower expenses.
  • Introducing the International Growth Scheme (IGS) for profits to be taxed at concessionary tax rate of 10% for a period of five years on incremental income from qualifying activities.
  • Extending and enhancing the 2.5 times tax deduction for donations.
  • Enhancing incentives under maritime and financial services sectors.

Personal Income Tax

  • Increasing the top marginal Personal Tax rate from 20% to 22% for chargeable income exceeding SGD320,000 from the Year of Assessment 2017 for the basis year ending 31 December 2016.
  • Allowing Personal Income Tax rebate of 50% up to SGD1,000 for the Year of Assessment 2015.
  • Simplifying claim for rental expenses of residential property to 15% of the gross rental income in addition to the mortgage interest expense.
  • Extending and enhancing the 2.5 times tax deduction for donations.
  • Increasing the Supplementary Retirement Scheme (SRS) contribution limitation to SGD15,300 and SGD35,700 for citizen/Singapore Permanent Resident and foreigner respectively.
  • Increasing CPF monthly salary ceiling from SGD5,000 to SGD6,000 from 1 January 2016.
  • Extending and enhancing the Angel Investors Tax Deduction (AITD) Scheme for claiming of tax deduction on 50% of the qualifying investment.

Goods and Services Tax and Others

  • Simplifying the pre-registration GST claim rules for GST-registered businesses.
  • Raising the Central Provident Fund (CPF) contribution rates for older workers.
  • Extending Wage Credit Scheme (WCS) for another two years to 2017.
  • Extending and enhancing the Temporary Employment Credit (TEC) for another two years to 2017. 

Please be informed that our comments on the relevant aspects are not intended to be exhaustive. Do kindly contact us to discuss issues relating to tax benefits, tax incentives, grants, etc. particularly for the financial and maritime industries which, if required, will be separately addressed.