18 March 2013

As announced in Budget 2013, companies will receive a 30% Corporate Income Tax (CIT) Rebate for the Years of Assessment (YA) 2013 to 2015, subject to a cap of $30,000 per YA. The IRAS has now provided details of the said rebate.

The CIT rebate will be given to all companies including Registered Business Trusts, companies that are not tax resident in Singapore and companies that receive income taxed at a concessionary tax rate. It will not apply to the amount of income derived by a non-resident company that is subject to final withholding tax.

The rebate will be computed on tax payable after deducting tax set-offs (eg foreign tax credit). Examples of how the rebate is calculated can be found on the IRAS website.

Rebate for YA 2013

The CIT rebate will be automatically computed by the IRAS when it assesses companies’ income tax returns (ie Form C/ Form C-S). Companies that have not filed their Estimated Chargeable Income (ECI) for YA 2013 may submit their ECI based on the net tax payable after taking the CIT rebate into account. Companies that have already submitted their ECI prior to the Budget Announcement can submit a revised ECI if they wish to reduce their ECI based on the net tax payable after CIT rebate.

Rebate for YAs 2014 and 2015

Companies do not need to take the CIT rebate into account in their ECI for YAs 2014 and 2015 as this will be automatically computed and allowed by the IRAS when it raises the ECI assessment. Companies that have already filed their ECI for YA 2014 need not revise their ECI filings as the IRAS is currently making system changes and will revise these assessments to take the CIT rebate into account and notify the affected companies accordingly.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website. Visit http://www.iras.gov.sg for more information.