27 September 2023

Introduced in Parliament on 18 September 2023, the Income Tax (Amendment) Bill (“Bill”) seeks to implement tax changes announced in the Government’s 2023 Budget Statement in the Income Tax Act 1947 (“Act”), and to make changes arising from international tax developments and the periodic review of Singapore’s tax system by the Ministry of Finance (“MOF”) to better reflect policy objectives.

Some of the changes arising from the Bill are set out below.

Implementing 2023 Budget Statement changes

Changes to implement tax measures announced in the 2023 Budget Statement include:

  • Enterprise Innovation Scheme (“EIS”): To encourage businesses to engage in research and development (“R&D”), innovation and capability development activities, the Bill introduces the EIS. Under the EIS, MOF will increase existing tax deductions/allowances for R&D, intellectual property (“IP”) protection, IP rights acquisition and licensing, and qualifying training to 300% of up to S$400,000 of qualifying expenses incurred for each qualifying activity per Year of Assessment (“YA”). Further, a new section will be introduced as part of the EIS to provide a 400% deduction of up to S$50,000 of qualifying expenditure paid by a person to an approved educational or research institution for undertaking a qualifying innovation project together with the person during the basis period for each YA. These new or enhanced tax measures will be effective from YA 2024 to YA 2028 (both years inclusive).
  • Philanthropy tax incentive scheme for family offices (“FOs”): To strengthen Singapore’s position as a regional philanthropy hub and encourage FOs to anchor their giving operations in Singapore, MOF will introduce a pilot tax incentive scheme for qualifying donors with FOs operating in Singapore. To qualify, the donors must have a fund under MAS’ section 13O or 13U scheme and meet eligibility conditions.

Other amendments

The amendments in the Bill arising from international tax developments and MOF’s periodic review of Singapore’s tax system include:

  • Taxing gains from the sale of foreign assets that are received in Singapore by businesses without economic substance in Singapore: A new section will be introduced to treat gains received in Singapore from the sale or disposal by an entity of a multinational group of any immovable or movable property situated outside Singapore (“foreign asset”), as income chargeable to tax. This section applies if the gains would not otherwise be treated as income or if the gains would otherwise be exempt from tax under the Act. The new section only applies to a sale or disposal of a foreign asset by an entity that is part of a multinational group and that does not have adequate economic substance in Singapore. This is to align the tax treatment of gains from the sale of foreign assets with the EU Code of Conduct Group guidance, which aims to address international tax avoidance risks. The change is in line with the focus on anchoring substantive economic activities in Singapore.
  • Prosecution of Automatic Exchange of Information (“AEOI”) offences by Controller of Income Tax: The Bill will amend the Act to provide that prosecution of AEOI offences may also be commenced at the instance or with the consent of the Comptroller of Income Tax (in addition to the Public Prosecutor).


From 6 to 30 June 2023, MOF invited the public to provide feedback on a draft version of the Bill. On 8 September 2023, MOF issued a summary of its response to the feedback received from the public consultation.

Reference materials

The Income Tax (Amendment) Bill is available on Singapore Statutes Online www.sso.agc.gov.sg.

The following materials are available on the Ministry of Finance website www.mof.gov.sg: