Singapore Budget 2013 – Overview of tax changes

26 February 2013

On 25 February 2013, the Deputy Prime Minister and Minister of Finance, Mr Tharman Shanmugaratnam, delivered the Budget Statement for the Financial Year 2013.

The budget changes include:

For individuals

• A personal income tax rebate for all resident individual taxpayers of 30% or 50% (depending on age, and up to a cap of $1,500) for the Year of Assessment 2013

• A simplification of the taxation of accommodation benefits enjoyed by employees (including company directors)

• Phasing out of the Equity Remuneration Incentive Schemes

For businesses

• The introduction of the Wage Credit Scheme, a 3-Year transition support package where the Government will co-fund 40% of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000

• A corporate income tax rebate of 30%, capped at $30,000 per YA, from YA 2013 to YA 2015

• A dollar-for-dollar Productivity and Innovation Credit (PIC) cash bonus (conditions apply) from YA 2013 to YA 2015, capped at $15,000 for the 3-year period

• Liberalising of the scope of PIC Automation Equipment

• Enhancing the PIC Scheme to include Intellectual Property in-licensing

• The removal of the availability of the Start-up Tax Exemption Scheme to property developers and investment holding companies incorporated from 26 Feb 2013

• Allowing the expiration of the deduction scheme for Upfront Land Premium for leases granted on or after 28 Feb 2013

• Allowing the expiration, on 30 Sep 2013, of the further tax deduction scheme for expenses incurred in relocation or recruitment of overseas talent

• Extending and refining the Qualifying Debt Securities (QDS) and Qualifying Debt Securities Plus (QDS+) Incentive Schemes

For the financial sector

• Extending and enhancing the Financial Sector Incentive Scheme

• Extending and refining the QDS and QDS+ Incentive Schemes

• Extending the tax exemption on income derived by primary dealers from trading in Singapore Government Securities

• Extending the Tax Incentive Scheme for Approved Special Purpose Vehicle engaged in securitisation transactions

• Enhancing the Tax Exemption Scheme to include underwriting of offshore specialised insurance risks

• Extending and enhancing the Tax Incentive Scheme for offshore insurance broking business

• Allowing the Offshore Insurance Business Scheme for Islamic Insurance and Reinsurance to expire

For the maritime sector

• Extending the maximum tenure of the Maritime Sector Incentive – Approved International Shipping Enterprise Award

Other tax incentives for businesses

• Allowing the Tax Incentive Scheme for family-owned investment holding companies to expire

• Withdrawing the Overseas Enterprise Incentive Scheme

• Withdrawing the Approved Cyber Trader Scheme

Property tax

• A more progressive property tax structure for residential properties from 1 Jan 2014

• The removal of the property tax refund concession for vacant properties with effect from 1 Jan 2014

The full text of the budget speech can be found at the Budget 2013 website at

Source: Inland Revenue Authority of Singapore (IRAS) and Ministry of Finance (MOF).