29 September 2022
On 12 September 2022, the Income Tax (Amendment) Bill (“Bill”) was introduced in Parliament. The Bill seeks amend the Income Tax Act 1947 (“ITA”) to implement tax changes announced in the 2022 Budget Statement and make other amendments to the ITA arising from the periodic review of the tax system.
Budget 2022 amendments
Proposed amendments include the following:
- Personal income tax of tax-resident and non tax-resident individual taxpayers: The top marginal personal income tax (“PIT”) rate of tax-resident individuals will be increased from the Year of Assessment (“YA”) 2024. The Bill provides for a tax rate of 23% for every dollar of the individual’s chargeable income from S$500,001 to S$1,000,000, and a rate of tax of 24% for every dollar of the individual’s chargeable income exceeding S$1,000,000 (both up from 22% currently). The PIT rates for certain income derived by non-tax-residents will also be increased from 22% to 24% for YA 2024 onwards. For income due to non-tax-resident individuals that is subject to withholding tax, the rate of withholding tax will be increased from 22% to 24% from 1 January 2023.
- Facilitate disclosure of company-related information for official duties: To support data-driven policymaking, operations and integrated service delivery, changes will be made to section 6 of the ITA to facilitate the disclosure of information by the Inland Revenue Authority of Singapore:
- Allow the Comptroller of Income Tax (“Comptroller”) to disclose income information of any person with the person’s express consent, to (a) any public officer or officer of a statutory board for the performance of any official duties (and not only for administering a written law or a public scheme), or (b) any other person engaged to facilitate the carrying out of such official duties, if that person makes a declaration of secrecy.
- Enable the Comptroller to disclose certain information prescribed in a new Eleventh Schedule to any public officer or officer of a statutory board for the performance of his or her official duties, without the consent of the person to whom the information relates.
- Other Budget 2022 amendments: Changes to the ITA are also proposed to effect other tax measures announced in the 2022 Budget Statement including the following:
- Extend the Aircraft Leasing Scheme from 31 December 2022 to 31 December 2027.
- Extend the last day of issue of qualifying project debt securities to qualify for exemption of tax under section 13 of the ITA from 31 December 2022 to 31 December 2025.
- Extend until 31 March 2023 the period during which qualifying income derived by the following individuals is exempt from tax:
- a non-resident arbitrator;
- a non-resident qualifying mediator for mediation services for a mediation which takes place in Singapore or which would have taken place in Singapore if the claim had not been settled or withdrawn;
- a non-resident individual for mediation services for a qualifying mediation which takes place in Singapore or which would have taken place in Singapore if the claim had not been settled or withdrawn.
Other proposed amendments
These amendments include the following:
- Amend section 63 (furnishing of estimate of chargeable income if no return is made under section 62) to allow the Comptroller to extend the deadline for filing an estimate of the chargeable income of a person beyond the current three months after the end of the accounting period relating to the year of assessment.
- Amend the definition of “local employee” under section 37O of the ITA (deduction for acquisition of shares of companies) to expand the definition of “local employee”, in relation to a company that claims a deduction for a qualifying acquisition of shares, to the following persons:
- an individual who is seconded to the acquiring company;
- an individual who is hired centrally and deployed to the acquiring company.
A condition for the deduction is that the company must have at least three local employees in the 12 months before the date of the acquisition of shares.
- Streamline the provisions concerning the Board of Review and empower the Chairperson of the Board of Review, having regard to the facts and circumstances of a particular case, to appoint a single member of the Board (instead of three members), being the Chairperson or a Deputy Chairperson of the Board, to exercise, discharge and perform the powers, functions and duties of the Board for that case.
Public consultation on draft Bill
From 8 June 2022 to 6 July 2022, the Ministry of Finance (“MOF”) conducted a public consultation on a draft version of the Bill and sought feedback on the proposed changes to the ITA. On 2 September 2022, MOF issued a summary of its response to feedback received.