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Singapore Budget 2020

Written by 
Sow Cheng

Highlight on Corporate Tax
√ Tax rate remain at 17% 
√  Tax rebate for YA 2020 granted at 25%, subject to a cap of $15,000
√ Additional 2 months of interest-free instalment if company paying CIT by Giro and file ECI within 3 months from financial year end

  • During period from 19.02.2020 to 31.12.2020
  • Before 19.02.2020 and has ongoing instalment payments to be made in March 2020

√  Enhanced carried-back relief system

  • The number of YAs to which unutilised Capital Allowances (CA) and trade losses from YA 2020 can be carried back will be increased from one YA to three YAs immediately preceding YA 2020 (i.e. YA 2017, YA 2018 and YA 2019).
  • Businesses may elect for the enhanced carry-back relief based on an estimate of the current year unutilised CAs and trade losses for YA 2020.

 √ Plant and Machinery

  •  Accelerate the write-off of the cost for plant and machinery acquire in financial year 2020.
  • Streamline the prescribed working life of P&M in the Sixth Schedule for capital allowance claims under Section 19

1.          Option to write-off over 2 years

2.          75% in the first YA 2021 and 25% in the second YA 2022

3.          No deferment of CA claims is allowed 

√ Renovation and Refurbishment (R&R)

  • Accelerate the deduction of expenses for qualifying R&R incur in year 2020 with option to claim in 1 YA (subject to the cap of $300,000 for every relevant period of 3 consecutive YA)

 √  Capital grants

  • Claim will not be allowed for tax deduction or allowances on expenditure funded by the grant from the government/statutory boards for capital grants approved on or after 1st January 2021

 √  Schemes :

  • Double Tax Deduction for Internationalism (DRDi) scheme will be extended until 31 December 2025 with expanded scope for expenses incurred on or after 1 April 2020
  • Mergers & Acquisitions (M&A) Scheme will be extended until 31 December 2025
  • Scheme under Section 13Z will extend and refine the upfront certainty of non-taxation for companies’ gains on disposal of ordinary shares from 1 June 2022 to 31 December 2027. This is not applicable to disposal of unlisted shares in an investee company that is in the business of trading, holding or developing immovable properties in Singapore or overseas.
  • Land Intensification Allowance (LIA) scheme will be extended until 31 December 2025
  • Further tax deduction scheme for research and development (R&D) under Section 14E,  incentive will lapse after 31 March 2020

Highlight on Personal Tax
√ Personal tax rate remains with top line rate of 22% of chargeable income in excess of $320k

√  Non-resident mediators and arbitrators: Withholding Tax Exemption (WTH) will be extended until 31 March 2022

√  Non-resident public entertainers: 10% concessionary WTH will be lapsed after 31 March 2022

√ Angel Investors Tax Deduction (AITD) will be lapsed after 31 March 2020

Highlight on Property tax

Rebates available as per following :
√  30% for accommodation and function room of hotels and service apartments, MICE space components of prescribed MICE;
√  15% for international airport, cruise or ferry terminal and shops located in hotels and service apartments, prescribed MICE venues and premises of tourist attraction;

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