Hi, I believe most of you will be interested in this year budget statement as all of you are aware that the productivity & innovation credit (PIC) grant has ended in YA2018. I have listed out most of the implementation regards to businesses and company for this year budget policy. The list will touched on the new grants & scheme available, adjustment in corporate tax and changes in the GST. Based on the policy, the government are still focusing on supporting the local start up and SMES, at the same time encouraging company to enter into international market.
Wage Credit Scheme – Receive co-funding for qualifying wage increases to your Singaporean employees earning a gross monthly wage of up to $4,000. 20% for 2018, 15% for 2019, and 10% for 2020
Corporate Income Tax rebate – 40% of tax payable, capped at $15,000 for YA2018; and 20% of tax payable, capped at $10,000 for YA2019
Enterprise Development Grant (EDG) – Up to 70% funding support for building capabilities (e.g. product development, innovation) and internationalisation. EDG will be launched in Q4 2018. In the interim, companies may continue to apply for the Capability Development Grant and the Global Company Partnership grant.
Double Tax Deduction for Internationalisation – 200% tax deduction on the first $150,000 of qualifying internationalisation expenses for each YA, without the need for prior approval. Take effect from YA2019.
PACT – Funding support to support collaborations between firms of all sizes, including capability building, co-innovation and accessing overseas opportunities. . Under PACT, companies can receive up to 70% co-funding, for projects undertaken in partnership with others.
Infrastructure Office – Brings together local and international firms to develop, finance and execute Asian infrastructure projects
Open Innovation Platform – Get matched to problem-owners or solution providers to collaborate and tackle industry problems through digital solutions. It is a virtual crowd-sourcing platform, where companies can list specific challenges that can be addressed by digital solutions. They will then be matched with info-communications and technology (ICT) firms and research institutes, to co-develop solutions.
Higher tax deductions from YA2019 to YA2025 to support businesses in their use and development of innovations
|Qualifying expenses incurred on R&D performed in Singapore
|Increase from 150% to 250%|
|IP Licensing Payments to Unrelated Parties||Increase from 100% to 200%
Capped at $100,000
|IP Registration Fees||Increase from 100% to 200%
Capped at $100,000
GST implementation on digital goods/services imported to Singapore with effect from 1 January 2020. Reverse charge mechanism required the Registered GST Company has to account for the services procure overseas as if he were the supplier. However, the company is entitled to claim back the GST as the input tax.
GST increased by 2%-points, from 7% to 9%, sometime in the period from 2021 to 2025.
Tax Deduction for Qualifying Donations – 250% tax deduction for qualifying donations will be extended for donations made on or before 31 December 2021. All other conditions of the scheme remain the same.
Adjustment to the Start-Up Tax Exemption (“SUTE”) scheme – For new company registration, the tax exemption has been reduce from 100% to 75% exemption on the first $100,000 of normal chargeable income; and 50% exemption on the next $100,000 of normal chargeable income. All other conditions of the scheme remain unchanged. This change will take effect on or after YA2020 for all qualifying companies under the scheme
Adjustment to the Partial Tax Exemption (“PTE”) scheme – For existing company, the tax exemption has been reduce to 75% exemption on the first $10,000 of normal chargeable income; and 50% exemption on the next $190,000 of normal chargeable income (previously it was $290,000). All other conditions of the scheme remain unchanged. This change will take effect on or after YA2020 for all companies (excluding those that qualify for the SUTE scheme) and bodies of persons.