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 http://www.singaporebudget.gov.sg.

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