Overview of Tax Changes for Businesses
In Singapore Budget 2024, the Minister for Finance announced that tax changes for businesses related to:
- Corporate Income Tax (“CIT”) Rebate for the Year of Assessment (“YA”) 2024
- Enhance the tax deduction for Renovation or Refurbishment (“R&R”)
- Introduce an additional Concessionary Tax Rate (“CTR”) tier of 15% for the Global Trader Programme (“GTP”)
Corporate Income Tax (“CIT”) Rebate for the Year of Assessment (“YA”) 2024, with a CIT Rebate Cash Grant for eligible companies
To help companies manage rising costs, a CIT Rebate of 50% of tax payable will be granted for YA 2024. Companies that have employed at least one local employee in 2023 will receive a minimum benefit of $2,000 in the form of a cash payout “CIT Rebate Cash Grant”.
Companies that have met the local employee condition will automatically receive the CIT Rebate Cash Grant by 3Q 2024. The CIT Rebate, less any CIT Rebate Cash Grant received, will be automatically incorporated in companies’ tax assessments raised after they file their CIT returns for YA 2024.
For example, Company A hired two local employees in 2023. It has a CIT assessment of $30,000 for YA 2024. Company A will receive a $2,000 CIT Rebate Cash Grant by 3Q 2024. It will receive another $13,000 [(50% * $30,000) – $2,000] in CIT Rebate in its YA 2024 CIT assessment.
The maximum total benefits of CIT Rebate and CIT Rebate Cash Grant capped at $40,000.
Enhance the tax deduction for Renovation or Refurbishment (“R&R”)
To ease businesses’ compliance burden and improve the relevance of the scheme, Ministry of Finance (MOF) will introduce the following enhancements from YA 2025:
- Expand the scope of qualifying expenditure to include designer or professional fees;
- Fix the relevant three-year period for the purpose of computing the R&R expenditure cap, with the first three-year period being from YA 2025 to YA 2027; and
- Allow an option to claim R&R deductions in one YA, subject to the prevailing expenditure cap.
Introduce an additional concessionary tax rate (“CTR”) tier of 15% for the Global Trader Programme (“GTP”)
As part of the periodic review to ensure that the tax incentives remain relevant and competitive, an additional CTR tier of 15% will be introduced under the GTP with effect from 17 February 2024.
