Second reading of the Income Tax (Amendment No. 3) Bill 2016

11 November 2016

The Income Tax (Amendment No. 3) Bill 2016 (Bill) was read for the second time by the Senior Minister of State for Finance and Law, Ms Indranee Rajah in Parliament on 10 November 2016.

The Bill encompasses income tax changes as announced in the 2016 Budget Statement, amendment on the implementation of the Country-by-Country Reporting, changes arising from periodic reviews of the income tax regime and suggestions accepted on the draft Bill from public feedback received in July.

To recap, the major changes outlined by Ms Indranee Rajah relate to the following:

  • Raising of the existing corporate income tax rebate from 30% to 50% of tax payable, with a cap of $20,000 rebate each year for Years of Assessment (YA) 2016 and 2017.
  • Enhancement of the M&A scheme to allow the 25% tax allowance on the first $40 million of the cost of qualifying share acquisitions incurred each year, up from $20 million.
  • Extension of the non-taxation of companies’ gains on disposal of their equity investments until 31 May 2022.
  • Extension of the Double Tax Deduction for Internationalisation scheme to 31 March 2020.
  • Capping of the total amount of personal income tax reliefs that an individual can claim at $80,000 per YA wef YA 2018.
  • Introduction of a pilot Business and Institutions of a Public Character (IPCs) Partnership Scheme from 1 July 2016 till end of 2018.
  • Implementation of Country-by-Country Reporting.

Other changes arising from the Ministry of Finance’s periodic review of the tax regime relate to:

  • Delinking of the income tax relief limit for CPF cash top-ups from the CPF top-up limit from 1 January 2016.
  • Granting of tax deduction of up to 200% for qualifying expenditure incurred on qualifying retail bonds issued from 19 May 2016 to 18 May 2021.

For further details, please refer to the Ministry of Finance’s website.

Source: Ministry of Finance