The 2018 Budget was announced on 19 February 2018. Corporate tax changes include the following:
Key corporate tax changes include:
- Enhancement of the tax rebate for year of assessment 2018 (income year 2017) to 40% of tax payable, capped at 15,000 Singapore dollars (SGD), and extension of the rebate to year of assessment 2019 at 20% of tax payable, capped at SGD 10,000.
- Adjustments to the Partial Tax Exemption and Start-up Tax Exemption schemes from year of assessment 2020, which reduce the maximum exempt income to SGD 102,500 (previously SGD 152,000) and SGD 125,000 (previously SGD 200,000), respectively.
- Introduction of a 250% tax deduction for qualifying research and development (R&D) projects performed in Singapore, and 200% tax deductions for the first SGD 100,000 of qualifying intellectual property (IP) registration costs and the first SGD 100,000 of qualifying IP licensing costs.
- Introduction of investment allowances for submarine cable systems landing in Singapore.
- Higher cap for double deduction for prescribed travelling expenses (for which no prior approval is needed) under the Double Tax Deduction for Internationalisation scheme.
- Introduction of a tax framework for Singapore Variable Capital Companies (S-VACC).
- Tax transparency for specified income of Singapore-listed Real Estate Investment Trusts Exchange-Traded Funds (REIT-ETFs).
- Extension of the Enhanced-Tier Fund scheme to all forms of fund vehicles.
- Rationalisation of the withholding tax (WHT) exemptions for the financial sector.
Other Budget changes include the following:
- Introduction of a goods and services tax (GST) reverse charge on services imported by businesses that make exempt supplies or those that do not make any taxable supplies with effect from 1 January 2020.
- Requirement for overseas vendors providing digital services to register for GST with effect from 1 January 2020 if their global turnover is more than SGD 1 million annually and their online sales to Singapore consumers exceed SGD 100,000.
- Increase GST rate from 7% to 9% sometime between 2021 and 2025.
- Increase in buyer's stamp duty for residential property purchases.
- Introduction of carbon tax of SGD 5 per tonne of greenhouse gas emissions.
For details of the 2018 Budget proposals, refer to our 2018 Budget Commentary at https://www.pwc.com/sg/en/publications/budget-commentary.html