13 July 2016

A public consultation on the draft Income Tax (Amendment) (No. 3) Bill 2016 is being held by the Ministry of Finance (MOF) for feedback to the proposed amendments to the Income Tax Act (ITA).

The key changes include:

2016 Budget Statement

• Enhancing the Corporate Income Tax (CIT) rebate for Years of Assessment (YAs) 2016 and 2017 from 30% to 50% of corporate tax payable, with a cap of $20,000 rebate per YA.
• Enhancing the Merger & Acquisition (M&A) scheme by granting the M&A allowance for the first $40 million (up from $20 million currently) of the consideration paid for qualifying M&As deals per YA till 31 March 2020.
• Extending the double tax deduction for internationalisation scheme for four years till 31 March 2020.
• Extending the upfront certainty of non-taxation of companies’ gains from disposal of equity investments till 31 May 2022.
• Piloting the Business and Institute of a Public Character (IPC) Partnership Scheme (BIPS) from 1 July 2016 to 31 December 2018 whereby businesses that send their employees for voluntary services, including secondments, to IPCs, will receive a 250% tax deduction on associated cost incurred, subject to caps.
• Capping the total personal income tax relief, at $80,000 per YA, with effect from YA 2018.

Country-by-Country Reporting (CbCR)

An amendment to enable implementation CbCR whereby with effect from enterprises’ financial years commencing on or after 1 January 2017, Singapore-headquartered multinational enterprises with global revenues exceeding S$1,125 million (equivalent to €750 million) will have to submit to IRAS an annual country-by-country (CbC) report containing the income, taxes paid, and other indicators of level of economic activities in every tax jurisdiction where they operate.

Refinements to existing tax policies and administration

Arising periodic review of Singapore’s income tax system, the changes are include:

• Delinking the income tax relief for CPF cash top-ups from the top-up limit from 1 January 2016 to keep tax benefits focused on supporting basic retirement needs.
• Granting of double tax deduction for costs attributable to issuance of retail bonds for five years with effect from 19 May 2016.

The feedback period is held from 8 July to 29 July 2016.

Consultation documents are available on the MOF website and the REACH consultation portal. Comments can be sent direct to the MOF via the website, email, fax or post.

Source: Ministry of Finance