29 November 2018

The Income Tax (Amendment) Act 2018 (“Amendment Act”) was gazetted on 12 November 2018 and has come into force from various dates.

The Act implements income tax changes announced in the 2018 Budget Statement as well as tax changes arising from the periodic review of Singapore’s income tax regime.

Key Budget changes include:

  • Enhancing the corporate income tax rebate for the Year of Assessment (“YA”) 2018 by raising the rebate percentage from 20% to 40% of tax payable, and the rebate cap from S$10,000 to S$15,000.
  • Adjusting the Start-Up Tax Exemption Scheme and Partial Tax Exemption Scheme from YA 2020. Among other things, the tax exemption under both schemes has been reduced from the first S$300,000 to S$200,000 of chargeable income. 
  • Increasing the tax deduction for staff costs and consumables incurred on qualifying R&D projects performed in Singapore from 150% to 250% from
    YA 2019 to YA 2025. 
  • Raising the expenditure cap for the Double Tax Deduction for Internationalisation claims, without prior approval from Enterprise Singapore or the Singapore Tourism Board from S$100,000 to S$150,000 per YA from
    YA 2019.

Changes arising from a periodic review of the tax regime include:

  • Enhancing the investigative powers of the Inland Revenue Authority of Singapore (“IRAS”) by providing authorised IRAS officers with the power of forced entry, power to arrest without warrant, and power to carry out body search. 
  • Allowing IRAS to share information with law enforcement agencies for the investigation or prosecution of the serious crimes listed in the First and Second Schedules to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. 

Reference materials

The Income Tax (Amendment) Act 2018 is available on the Singapore Statutes Online website sso.agc.gov.sg.

 

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