The following are some highlights of the recent update under the Income Tax (Amendment) Act 2017 that published in the Government Gazette (electronic edition) on 26 October 2017.
Personal taxation
All individual tax residents will receive a personal income tax rebate of 20% of tax payable for YA 2017. Tax rebate will be capped at $500 per taxpayer.
Enacted: Remission of tax for YA 2017 of the Income Tax (Amendment) Act 2017
Corporate taxation and unincorporated business
Enhancing and extending the Corporate Income Tax Rebate
The corporate income tax rebate cap will be raised from S$20,000 to S$25,000 for YA 2017 (with the rebate rate unchanged at 50%).
Enacted: sec 92F
The corporate income tax rebate will be extended for another year to YA 2018, at a reduced rate of 20% of tax payable, with a cap at S$10,000.
Enacted: sec 92G
Extending the withholding tax exemption for structured products offered by Financial Institutions
The qualifying period for the withholding tax exemption on payments made to non-resident non-individuals for structured products offered by financial institutions will be extended from 1 April 2017 to 31 March 2021. All other conditions of the scheme remain the same.
Enacted: sec 13(1)(zj)
Withdrawing capital allowances for energy efficient equipment and technology
The accelerated two-year Writing Down Allowances (WDA) for acquisition of Intellectual Property Rights (IPRs) for Media and Digital Entertainment (MDE) content scheme will be allowed to lapse, in respect of IPRs acquired for MDE content after the last day of the basis period for YA 2018.
MDE companies or partnerships may elect to claim WDA over a writing-down period of 5, 10 or 15 years on the capital expenditure incurred to acquire the qualifying IPRs under section 19B of the ITA.
Enacted; sec 19B of the ITA
Withdrawing the tax deduction for Computer Donation Scheme.
The 250% tax deduction granted on donation of computers by any company to an Institution of Public Character or prescribed educational, research or other institution in Singapore will be withdrawn after 20 February 2017.
Enacted: sec 37 of the ITA
Tax Incentive
Extending and refining the Aircraft Leasing Scheme
To continue encouraging the growth of the aircraft leasing sector in Singapore, the Aircraft Leasing Scheme (ALS) will be extended and refined as follows:
(a) The ALS, approved aircraft lessors and approved aircraft managers, on income derived from the leasing and managing of aircraft or aircraft engines and qualifying ancillary activities under section 43Y and section 43Z of the ITA respectively, will be extended until 31 December 2022.
(b) The scope of qualifying ancillary activities for approved aircraft lessors under section 43Y of the ITA has enhanced and updated to cover incidental income derived from the provision of finance in the acquisition of aircraft or aircraft engines by any lessee (applicable to income derived on or after 21 February 2017 for all incentive recipients), and
(c) The concessionary tax rate on income derived from leasing of aircraft or aircraft engines and qualifying ancillary activities will be streamlined from 5% and 10% to a single rate of 8% (applicable to new or renewal incentive awards approved on or after 1 April 2017).
In addition, automatic withholding tax (WHT) exemption regime will be extended to qualifying payments made by approved aircraft lessors to non-tax residents (excluding a permanent establishment in Singapore) in respect of qualifying loans to finance the purchase of aircraft and aircraft engines, subject to conditions, entered on or before 31 December 2022.
The Economic Development Board website “Why Singapore Ready to Invest Incentive for Business & Investment Aircraft Leasing Scheme”.
Enacted: sec 43Y of the ITA
Extending the tax incentive schemes for Project and Infrastructure Finance
The current package of tax incentive schemes for project and infrastructure finance includes:
(a) Exemption of qualifying income from qualifying project debt securities (QPDS).
(b) Exemption of qualifying income from qualifying infrastructure projects or assets received by approved entities listed on the Singapore Exchange (SGX).
(c) Concessionary tax rate of 10% on qualifying income derived by an approved infrastructure trustee manager or fund management company from managing qualifying SGX-listed business trusts or infrastructure funds in relation to qualifying infrastructure projects or assets.
(d) Remission of stamp duty payable on the instrument of transfer relating to qualifying infrastructure projects or assets to qualifying entities listed, or to be listed, on the SGX.
With the exception of the stamp duty remission, the existing package of tax incentive schemes for project and infrastructure finance will be extended until 31 December 2022.
The stamp duty remission on the instrument of transfer relating qualifying infrastructure projects/assets to qualifying entries listed, or to be listed on the Singapore Exchange will be allowed to lapse after 31 March 2017. All other conditions of the schemes are unchanged.
The Monetary Authority of Singapore will release further details of the extension.
Enacted: sec 43ZA of the ITA
Last updated: 3 November 2017