- Corporate Income Tax Rate
- Writing Down Allowance (WDA) For Acquisition Of Qualifying Intellectual Property Rights (IPRs)
- Investment Allowance (IA)
- Income Tax Concessions For Singapore-Listed Real Estate Investment Trusts (S-REITs)
- Tax Concessions For Singapore-Listed Real Estate Investment Trusts Exchange-Traded Funds (REITs-ETFs)
- Tax Incentive Schemes For Funds Managed By Singapore-Based Fund Managers (Qualifying Funds)
- Designated Unit Trust (DUT) Scheme
- Approved Unit Trust (AUT) Scheme
- Property Tax (Tourist Projects) Order
- Special Employment Credit (SEC) And Additional Special Employment Credit (ASEC)
- Innovation Agents Programme
- SME Co-Investment Fund III
- SME Working Capital Loan Scheme
- Expansion Of The SMEs Go Digital Programme
- Digital Services Lab (DSL)
- New Centres Of Innovation (COIs) In Aquaculture And Energy
- Global Ready Talent Programme (GRTP)
- Career Support Ptogramme (CSP)
- Foreign Workforce Measures
- Transitional Support Measures
1 – CORPORATE INCOME TAX RATE
There was no revision in corporate tax rate unveiled in budget 2019 as the current rate of 17% is one of the lowest rates in the region.
2 – WRITING DOWN ALLOWANCE (WDA) FOR ACQUISITION OF QUALIFYING INTELLECTUAL PROPERTY RIGHTS (IPRs)
Under Section 19B of the ITA, companies and partnerships are granted WDA on capital expenditure incurred in acquiring qualifying IPRs for use in its trade or business. The expenditure can be written down over 5, 10 or 15 years. In recognition that IPRs are important creators of value in a knowledge-based economy, the WDA under Section 19B will be extended to cover capital expenditure incurred in respect of qualifying IPRs acquired on or before the last day of the basis period for YA 2025 (instead of YA 2020).
3 – INVESTMENT ALLOWANCE (IA)
As announced in Budget 2016, the Automation Support package includes 100% IA support on the amount of approved capital expenditure (capped at S$10 million), net of grants, on projects approved by Enterprise Singapore during 1 April 2016 to 31 March 2019.
The IA incentive in the Automation Support Package will be extended for another two years till 31 March 2021 to maintain support to companies in their automation, productivity and scale-up efforts. The approved capital expenditure will remain capped at S$10 million per project.
4 – INCOME TAX CONCESSIONS FOR SINGAPORE-LISTED REAL ESTATE INVESTMENT TRUSTS (S-REITs)
S-REITs are granted the following income tax concessions:-
- Tax exemption on S-REITs distributions received by individuals, excluding individuals
who derive any distribution:-
- through a partnership in Singapore; or
- from the carrying on of a trade, business or profession;
- Concessionary income tax rate of 10% for S-REITs distributions received by nonresident
non-individual investors; and
- Tax exemption on qualifying foreign-sourced income (i.e. foreign-sourced dividend income, interest income, trust distributions and branch profits) received by S-REITs and wholly-owned Singapore resident subsidiary companies of S-REITs, that is paid out of qualifying income or gains in respect of overseas property acquired on or before 31 March 2020 by the trustee of the S-REITs or its wholly-owned Singapore resident subsidiary company.
To continue to promote the listing of REITs in Singapore and to strengthen Singapore’s position as a REITs hub in Asia, the above tax concessions for S-REITs will be extended till 31 December 2025 (instead of 31 March 2020). The sunset clause for the tax exemption on S-REITs distributions received by individuals will be removed. All the other conditions for the income tax concessions remain the same.
Further details will be released by MAS by May 2019.
5 – TAX CONCESSIONS FOR SINGAPORE-LISTED REAL ESTATE INVESTMENT TRUSTS EXCHANGE-TRADED FUNDS (REITs ETFs)
Currently, REITs ETFs are granted the following income tax concessions:-
- Tax transparency treatment on the distributions received by REITs ETFs from SREITs, which are made out of the latter’s specified income;
- Tax exemption on such REITs ETFs distributions received by individuals, excluding individuals who derive any distribution:-
- through a partnership in Singapore; or
- from the carrying on of a trade, business or profession; and
- 10% concessionary tax rate on such REITs ETFs distributions received by qualifying
The above tax concessions for REITs ETFs will be extended till 31 December 2025 (instead of 31 March 2020). The sunset clause for the tax exemption on REITs ETFs distributions received by individuals will be removed. All the other conditions for the income tax concessions remain the same.
Further details will be released by MAS by May 2019.
6. TAX INCENTIVE SCHEMES FOR FUNDS MANAGED BY SINGAPORE-BASED FUND MANAGERS (QUALIFYING FUNDS)
Currently, Qualifying Funds are granted the following tax concessions, subject to
- Tax exemption on specified income (“SI”) derived from designated investments (DI); and
- Withholding tax exemption on interest and other qualifying payments made to non resident
persons (excluding permanent establishments in Singapore).
Qualifying Funds comprise the following:-
- Basic tier funds (Sections 13CA and 13R schemes); and
- Enhanced tier funds (Section 13X scheme)
The key refinements are as follows:-
- The condition that a basic tier fund must not have 100% of the value of its issued securities beneficially owned, directly or indirectly, by Singapore persons will be removed from YA 2020;
- The Tier Fund scheme will be enhanced from 19 February 2019 to:-
- include co-investments, non-company SPVs and more than two tiers of SPVs; and
- allow debt and credit funds to access the “committed capital concession”; and include managed accounts.
- The list of DI will be expanded from 19 February 2019 by removing the counter-party and currency restrictions, and including investments such as credit facilities and advances, and Islamic financial products that are commercial equivalents of DI. The condition for unit trusts to wholly invest in DI will be removed;
- The list of SI will be enhanced from 19 February 2019 to include income in the form of payments that fall within the ambit of Section 12(6) of the ITA; and
- Qualifying non-resident funds under Sections 13CA and 13X will be able to avail themselves of the 10% concessionary tax rate applicable to qualifying non-resident non-individuals when investing in S-REITs and REITs ETFs distributions made during the period from 1 July 2019 to 31 December 2025.
Further details will be released by MAS by May 2019.
7 – DESIGNATED UNIT TRUST (DUT) SCHEME
Under the existing DUT scheme, specified income derived by a unit trust with the DUT status is not taxed at the trustee level, but is taxable upon distribution in the hands of investors. Qualifying foreign investors and individuals are exempt from tax on distributions made by a DUT.
This DUT scheme will lapse after 31 March 2019. Funds in the form of unit trusts may apply for other tax incentives for funds. Existing DUTs will continue to receive the tax deferral benefits under the DUT scheme, on and after 1 April 2019, if they continue to meet all the conditions.
8 – APPROVED UNIT TRUST (AUT) SCHEME
Under the existing AUT scheme, the trustee is taxed on its investment income, and 10% of the gains derived from the disposal of securities and the remaining 90% of the gains from the disposal of securities are instead taxed in the hands of the unit holders when distributed. Tax exemption is allowed on such distribution if the unit holder is:-
- an individual resident in Singapore; or
- a person who is not resident in Singapore and has no permanent establishment in Singapore.
This AUT scheme will lapse after 18 February 2019. Existing AUTs will continue to receive the tax concession under the AUT scheme for a period of five years from YA 2020 to YA 2024. This will allow existing AUTs sufficient time to transit to alternative tax incentive schemes, where relevant.
9 – PROPERTY TAX (TOURIST PROJECTS) ORDER
With the introduction of this scheme in 1987, approval for new tourist projects may be granted to have their Annual Value computed based on 6% of the preceding year’s gross receipts, for the first five years from the completion of the buildings.
This scheme will lapse after 18 February 2019 as there are various schemes in place to support tourism projects that have clear economic benefits to Singapore.
10 – SPECIAL EMPLOYMENT CREDIT (SEC) AND ADDITIONAL SPECIAL EMPLOYMENT CREDIT (ASEC)
The aim of the SEC scheme was to subsidise the wages of Singaporean workers aged 55 and above who earned up to S$4,000/- a month, while the ASEC scheme encourages companies to hire workers who are above the re-employment age of 67.
With tighter labour market and more Singaporeans choosing to work longer, more companies will be hiring older workers. To support employers in hiring older Singaporean workers, the Minister has extended the SEC and ASEC for another year, until 31 December 2020.
11 – INNOVATION AGENTS PROGRAMME
To support enterprises in their innovation efforts and accelerate their growth, Enterprise Singapore will identify individuals with deep expertise in technology, strong track record in growing businesses, and access to global industry networks. These Innovation Agents will be matched with enterprises that aspire to use technology to improve existing businesses or build new ones. Innovation Agents will provide mentorship to enterprises to identify innovation opportunities, and facilitate connections to valuable technology and business partners.
Depending on enterprises’ needs, Innovation Agents may provide consultation on a oneto- one basis, or on a group basis to groups of enterprises or consortia looking to capture new market opportunities through innovation. The duration of an engagement may vary from a few months to a year, depending on its scope. Further details will be shared by Enterprise Singapore later this year or alternatively contact Enterprise Singapore at email@example.com.
12 – SME CO-INVESTMENT FUND III
To continue supporting firms to scale up and internationalise, Temasek Holdings will participate as a co-investor in this Fund.
Qualifying investee companies must have key management functions and headquarter activities based in Singapore, and have revenues of up to S$500 million.
Interested private sector co-investors and potential investee companies may contact Heliconia Capital Management Pte Ltd at firstname.lastname@example.org for more information.
13 – SME WORKING CAPITAL LOAN SCHEME
To help address Singapore SMEs’ near-term cash flow concerns and growth financing needs, the Minister has decided to enhance SME Working Capital Loan by extending this support for another two years till 31 March 2021 and will review thereafter.
Further details may be obtained from Enterprise Singapore at email@example.com.
14 – EXPANSION OF THE SMEs GO DIGITAL PROGRAMME
The SMEs Go Digital programme, announced in Budget 2017, strives to assist SMEs in growing digital capabilities. The key components are as follows:-
- Industry Digital Plans (IDPs) serves as a guide for SMEs on the digital technologies and skills training programmes.
- SMEs can access pre-approved digital solutions on the whole-of-government (WOG) Business Grants portal, and apply for the Productivity Solutions Grant (PSG) for funding support up to 70% of qualifying costs.
- Infocomm Media Development Authority (IMDA) works with key industry leaders on digital sector projects to pilot new digital solutions.
In the Budget 2019, IMDA will expand the SMEs Go Digital programme by:-
- Developing IDPs in the Accountancy, Sea Transport and Construction sectors.
- Extending the range of pre-approved solutions to include more advanced digital solutions such as artificial intelligence (AI)-infused solutions and cybersecurity solutions.
15 – DIGITAL SERVICES LAB (DSL)
The DSL is a three year pilot that will work with the industry using digital capabilities to address digitalization challenges. By researching and combining current technologies, DSL engineers and system architects can develop solutions to help companies manage early-stage technology development risks. Participating companies may apply for funding support of up to 70% of qualifying costs.
Further information may contact Digital services at firstname.lastname@example.org
16 – NEW CENTRES OF INNOVATION (COIs) IN AQUACULTURE AND ENERGY
COIs supports local SMEs and start-ups with technology innovation by providing assistance in developing and testing technology products through laboratory facilities, consultancy services and training courses. Two new COIs, Aquaculture and Energy, will be set up in Temasek Polytechnic and Nanyang Technological University respectively, in addition to the current eight COIs.
The Aquaculture COI aims to support growth and internationalization of local enterprises, improving food resilience in Singapore and also allowing enterprises access to applied research capabilities and services in aquaculture. The Energy COI on the other hand strives to drive innovation in energy efficiency, renewable energy and electric mobility to promote environmental sustainability.
Further information may contact Enterprise Singapore at email@example.com
17 – GLOBAL READY TALENT PROGRAMME (GRTP)
GRTP bring together existing young talent programmes, namely the SME Talent Programme, Young Talent Programme, and Go Southeast Asia Award, into a single programme. Under GRTP, students can take up local internships provided by local companies or overseas internships provided by local and foreign companies.
Students will receive monthly internship stipends and overseas allowances. Students can apply for GRTP through their Institutes of Higher Learning (i.e. universities, polytechnics and Institutes of Technical Education). This scheme is open to students who are Singapore Citizens and permanent residents. Participating local firms can receive funding support of up to 70% of the students’ monthly internship stipends.
(b) Management Associate Programmes
GRTP also supports local firms in sending young Singaporeans with up to three years of working experience on job postings in key overseas markets.
Participating firms can receive funding support for part of the expenditure incurred in sending young Singaporeans overseas.
Further details will be released by Ministry of Trade and Industry’s (MTI) at COS.
18 – CAREER SUPPORT PROGRAMME (CSP)
The CSP was first introduced in year 2015 and is part of the Adapt and Grow initiative. It provides salary support to encourage employers to hire retrenched mature (individuals who are 40 years old or above) or long-term unemployed (individuals who have been unemployed for 6 months or more) Singapore Citizens for Professional, Manager, Executive and Technician (PMET) jobs.
The CSP will be extended for two more years till March 2021.
The support parameters will remain unchanged and is as follows:-
|Salary support for Singapore Citizen PMETs||First 6
|≥40 years old, unemployed and looking for jobs ≥ 12 months||50%||30%||20%|
|≥40 years old, unemployed and actively looking for jobs for 6 months to < 12 months Or made redundant||40%||20%||N.A.|
|< 40 years old, unemployed and actively looking for jobs ≥ 6 months||20%||10%||N.A.|
Gross monthly salary*:
At least S$3,600/month for SMEs^
At least S$4,000/month for non-SMEs^
(Funded gross monthly salary capped at S$7,000/month)
* The sum of the new hire’s monthly basic salary and fixed monthly allowance.
^ Companies must be legally registered or incorporated in Singapore, with a Unique Entity
19 – FOREIGN WORKFORCE MEASURES
(a) Reduction in Dependency Ration Ceiling (DRC)
DRCs will remain unchanged for all sectors except the services sector:-
|Services||40%||To be reduced to 39% on 1 January 2020, and to 35% on 1 January 2021*|
|Marine Shipyard||77.8%||No change|
|S Pass sub-DRC|
|Services||15%||To be reduced to 13% on 1 January 2020, and to 10% on 1 January 2021*|
|All other sectors||20%||No change|
* When a DRC or a sub-DRC cut is implemented, firms will not be able to renew work passes of foreign workers that have exceeded the revised DRC or sub-DRC. However, for the foreign workers above the DRC/sub-DRC limits, firms can retain them until their work passes expire to avoid disrupting existing operations.
(b) Foreign Worker Levy rates
Foreign Worker Levy rates will remain unchanged for all sectors. The earlier announced Foreign Worker Levy increases for the Marine Shipyard and Process sectors will be deferred for another year.
|Sector / Pass Types||Tier||Dependency Ratio Ceiling (DRC)||Levy Rates (S$) (R1/R2)|
|1 Jul 2018||1 Jul 2019||1 Jul 2020|
|S-Pass||Basic Tier||≤ 10%||330/-||330/-||To be announced in 2020|
|Construction WPH||Basic Tier||≤ 87.5%||300/- / 700-||300/- / 700-||300/- / 700-|
|MYE-Waiver||600/- / 950/-||600/- / 950/-||600/- / 950/-|
|Services WPH||Basic Tier||≤ 10%||300/- / 450/-||300/- / 450/-||To be announced 2020|
|Tier 2||10-25%||400/- / 600/-||400/- / 600/-|
|Tier 3||25-35%||600/- / 800/-||600/- / 800/-|
|Marine Shipyard WPH||Basic Tier||≤ 77.8%||300/- / 400/-|
|Process WPH||Basic Tier||≤ 87.5%||300/- / 450/-|
|MYE- Waiver||600/- / 750/-||
600/- / 750/-
|Manufacturing WPH||Basic Tier||≤ 25%||250/- / 370/-||250/- / 370/-|
|Tier 2||25-60%||350/- / 470/-||350/- / 470/-|
|Tier 3||50-60%||550/- / 650/-||550/- / 650/-|
Numbers underlined are Foreign Worker Levy rates announced at Budget 2019. Strike-outs refer to
earlier-announced levy rates (i.e., before Budget 2019).
20 – TRANSITIONAL SUPPORT MEASURES
The Government will extend the enhanced support levels of up to 75% for the Enterprise Development Grant (EDG) and the Productivity Solutions Grant (PSG) and expand the scope of the PSG to help firms adjust to the impending foreign workforce policy changes that will take effect from 1 January 2020.
(a) Enhancements to the Enterprise Development Grant (EDG)
The EDG’s enhanced support level of up to 70% will be extended for three more
years, up to 31 March 2023.
To ensure that the benefits of enterprise transformation are passed on to our workers, enterprises will also need to commit to outcomes for workers, such as wage increases, in order to qualify for the EDG, with effect from 1 April 2020. Details will be shared at a later date.
Enterprises can apply for the EDG through the Business Grants Portal.
(b) Enhancements to the Productivity Solutions Grant (PSG)
Depending on the sector which the PSG solution falls under, the support level (currently up to 70%) will drop to 50% after 31 March 2020. To support firms in making the transition, the PSG support level of up to 70% will be extended to 31 March 2023.
To further support firms, the PSG will be enhanced to include a component that supports worker upgrading. Eligible enterprises will be able to receive a subsidy for up to 70% of their out-of-pocket training expenses (i.e. the remaining amount which is not already covered by other government training subsidies such as those under SkillsFuture), capped at S$10,000/- per enterprise. This will last until 31 March 2023.
Enterprises applying for the training subsidy under the enhanced PSG must submit a training plan, which will be assessed. They will only be eligible for the training subsidy after their PSG application has been approved. Enterprises can apply for PSG through the Business Grants Portal. Further details will be released by Ministry of Trade and Industry’s (MTI) and Ministry of Education’s (MOE) at the COS.