Singapore Budget 2018 - Tax Changes & Measures Introduced

Singapore's Budget Day and its accompanying Budget and Committee of Supply debates has come and go. Our president has also approve the budget. Now let us get you up to speed with some of the tax changes and measures introduced.
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Corporate Income Tax (CIT) Rebate

Pre-budget	Post-budget
All companies are granted a CIT rebate of 20% of tax payable, capped at S$10,000 for YA2018.	CIT Rebate of 20% of tax payable, capped at S$10,000 will be extended to YA2019. For YA2018. the CIT rebate will be enhanced to 40% of tax payable, capped at S$15,000.

Start-Up Tax Exemption (SUTE) Scheme

Pre-budget	Post-budget
All companies, subject to conditions, qualify for the following for the first three YAs: 100% tax exemption on the first S$100,000 of normal chargeable income. 50% tax exemption on the next S$200,000 of normal chargeable income.	75% tax exemption on the first S$100,000 of normal chargeable income. 50% tax exemption on the next S$100,000 of normal chargeable income. This will be effective on YA2020 onwards.   All other conditions of the scheme remains unchanged.

Partial Tax Exemption (PTE) Scheme

Pre-budget	Post-budget
All companies (except those qualified for SUTE) qualify for the in each YA: 75% tax exemption on the first S$10,000 of normal chargeable income. 50% tax exemption on the next S$290,000 of normal chargeable income.	75% tax exemption on the first S$10,000 of normal chargeable income. 50% tax exemption on the next S$190,000 of normal chargeable income. This will be effective on YA2020 onwards. All other conditions of the scheme remains unchanged.

Double Tax Deduction for Internationalisation (DTDi) Scheme

Pre-budget

Post-budget

All companies are allowed 200% tax deduction on qualifying expenses for market expansion and investment development subject to approval from International Enterprise (IE) Singapore or Singapore Tourism Board (STB). Approval from IE Singapore or STB for tax deductions for the first S$100,000 of qualifying expenses is not required, provided these expenses incurred are on the following activities for each YA: Overseas business development trips. Overseas study trips. Participation in trade fairs abroad. Participation in approved local trade fairs.

The amount of qualifying expenses for tax deductions without prior approval from IE Singapore or STB, will be raised from S$100,000 to S$150,000 per YA. This will be effective from YA2019.   All other conditions of the scheme remains unchanged.

Donations

Pre-budget	Post-budget
250% tax deductions on qualifying donations from 1 January 2016 to 31 December 2018.	250% tax deductions for qualifying donations will be extended to 31 December 2021.   All other conditions of the scheme remains unchanged.

Productivity Solutions Grant (PSG)

Pre-budget	Post-budget
-	Existing Innovations & Capability Voucher (ICV) by SPRING Singapore, Landscape Productivity Grant by National Parks Board (NParks) and SMEs Go Digital Programme by Infocomm and Media Development Authority (IMDA) will merge under a single PSG from 1st April 2018 onwards.   The PSG will support funding support of up to 70% of qualifying costs.

Enterprise Development Grant (EDG)

Pre-budget	Post-budget
​Separately offered by: Capability Development Grant (CDG) by SPRING Singapore Global Company Partnership (GCP) by IE Singapore	The EDG will provide funding support of up to 70% of qualifying costs from FY2018 – FY2019. EDG will be launched in Q4 2018, on the Business Grants Portal (BGP).

Partnerships for Capability Transformation (PACT)

Pre-budget	Post-budget
-	The PACT will provide funding support of up to 70% of qualifying costs when businesses collaborate to upgrade capabilities or partner each other for business development and internationalisation.

Infrastructure Office

Pre-budget	Post-budget
-	Set-up by Enterprise Singapore and Monetary Authority of Singapore (MAS) later this year, it will serve as a platform for the exchange of information on infrastructure opportunities in Asia and facilitates infrastructure investments and financing, between regional players across the value chain.

Research and Development (R&D)

Pre-budget	Post-budget
Businesses can claim tax deductions on qualifying expenditure incurred on qualifying R&D projects performed in Singapore; 150% tax deduction for staff costs and consumables incurred and 100% tax deduction for other qualifying expenditure.	Tax deductions for staff costs and consumables incurred on qualifying R&D projects will be increase from 150% – 200%. This will be effective from YA2019 to YA2025.   All other conditions of the scheme remains unchanged.

Wage Credit Scheme (WCS)

Pre-budget	Post-budget
WCS co-funds 20% of qualifying wage increases for the qualifying period of 2016 and 2017.	20% of qualifying wage increases in 2018 15% of qualifying wage increases in 2019 10% of qualifying wage increases in 2020

Goods and Services Tax (GST) on Imported Services

Pre-budget	Post-budget
-	GST will be levied on imported services, such as consultancy and marketing services from overseas suppliers, or downloaded music and apps. This will be effective from 1 January 2020.

The list mentioned above is non-exhaustive. Further details can be found in the Budget 2018 website. 

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Need help navigating the tax changes and announcements from Budget 2018.
At IGS Consulting, we are kept abreast with Singapore’s financial and tax developments. Contact our taxation specialists here to assist you with your tax requirements.