The COVID-19 crisis has adversely impacted the global economy and Singapore companies and businesses were also negatively impacted by the various circuit breaker measures implemented. The Singapore government has since announced various support schemes in the income tax rebate and reliefs area for YA2020.
The schemes were first announced in the annual 2020 Budget speech, followed by updates in the Resilience Budget and thirdly the Solidarity Budget. The total fiscal stimulus measure now stands at SGD59.9 billion or 12% of Singapore annual GDP.
Singapore Corporate Income Tax Rebate
In the latest update for YA2020, corporate tax rebate amounting to 25% of tax payable (capped at SGD15,000 is granted for all Singapore companies.
Automatic Deferment of Corporate Income Tax Payments
All companies with corporate tax payments due in the months of April, May and June 2020 will be granted an automatic three-month deferment. The payments that are deferred from April, May and June 2020 will be collected in July, August and September 2020 respectively.
Property Tax Rebates
For the period of FY2020, commercial properties are entitled to enhanced property tax rebates. 100% rebate of property tax payable is granted for owners of hotel buildings, service apartments and exhibition centre, retail and F&B shops, premises in international airport and cruise and other tourist attractions badly affected by COVID-19. 60% rebate is granted for integrated resorts such as Marina Bay Sands and Resorts World Sentosa. 30% rebate is granted for other non-residential properties such as industrial, offices and warehouses. These rebates are to be passed through to tenants by property owners.
Enhanced Jobs Support Scheme (JSS)
The first Jobs Support Scheme was first announced in Budget 2020 and further enhanced in the Resilience Budget, Solidarity Budget and after extension of Circuit Breaker to 1st June 2020. Eligible employers would receive a 25%/50%/75% wage subsidy (depending on business sector) on the gross monthly wages of each local employee (Singapore Citizens and Permanent Residents) for the months of October to December 2019, subject to a monthly wage cap of $4,600 per employee. This payout will be made in April 2020. The JSS will also cover 6 additional months’ of wages, with payouts in July 2020 and October 2020. Under the Solidarity Budget and following the circuit breaker extension to 1st June 2020, 75% of wage support will be provided for 2 months’ salary in April 2020 and May 2020.
Other corporate tax schemes and reliefs
- Carry Back Relief Scheme enhancement
Unabsorbed tax losses and unutilized wear and tear allowances can be carried back up to 3 preceding YA with effect in YA2020, subject to maximum of SGD100,000
- Acceleration of eligible claims on Plant and Machinery cost
Capital expenditure made in FY2020 can now be claimed over 2 years of assessment which increases current tax deductible. 75% of cost incurred can be claimed in the 1st year while balance 25% of cost incurred can be claimed in the 2nd year.
- Double tax deduction for Internationalisation Scheme enhancement
The scheme which allows 200% deduction on cost incurred for internationalization acitivies will now be extended to 31 December 2025 and effective 1 April 2020, additional scope of activities will be allowed for double tax deduction such as third party consultancy costs.
The various support measures are aimed at assisting Singapore companies to tide through the financial downturn under the COVID-19 pandemic.
PWCO is a qualified tax professional services firm with over 30 years of experience in the industry. Our firm keeps up to date with latest IRAS legislative changes and is able to ease your corporate tax filing procedures to ensure Singapore companies enjoy the maximum benefits of IRAS tax rebates and incentives and remain in full compliance with the local tax legislation.
Links to our summary of measures provided in the Singapore Budget 2020 announcements can be found at:
- Singapore Budget 2020 – Corporate and Businesses
- Supplementary Singapore Budget 2020 – Second Stimulus Package
- Solidarity Budget 2020 (3rd Round of Strong Support Measures)