The Finance (Income Taxes) Act 2025 (the Act) formally entered into law upon receiving Presidential Assent on 25 November 2025, with publication in the Gazette on 8 December 2025. The legislation enacts several Budget 2025 proposals and introduces additional substantive tax changes, demanding immediate attention from accounting and tax professionals for compliance and planning.
Primary Budget-Led Measures:
The Act implements several relief and incentive measures for the Year of Assessment (YA) 2025:
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Corporate & Personal Tax Rebates: A CIT Rebate and a CIT Rebate Cash Grant are established for eligible companies. A separate Personal Income Tax Rebate is also introduced for YA 2025. Practical Issue: Practitioners must promptly ascertain client eligibility and calculate the rebate impact on 2025 provisional tax estimates and cash flow projections.
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Innovation & Remuneration Incentives: A new deduction is introduced for payments under approved cost-sharing agreements for innovation. Concurrently, a tax deduction will be allowed for payments made for issuing new holding company shares under employee equity-based remuneration schemes. Impact: These are strategic tools for fostering R&D collaboration and streamlining equity compensation in group structures. Engagement with the tax authorities on agreement “approval” will be critical.
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Capital Market Stimuli: A tax exemption is introduced for fund managers’ income from funds investing substantially in Singapore-listed equities. A new Listing CIT Rebate is also introduced to incentivise new corporate listings on Singapore’s exchange.
Significant Non-Budget Amendments:
The Act includes major changes not previously announced in the Budget:
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Green Credit Deduction: From YA 2026, a new tax deduction will be available for surrendering prescribed green certificates or credits. Impact: This creates a direct tax linkage to corporate sustainability initiatives. Practical Issue: The definition of “prescribed” certificates and the surrender mechanism require urgent clarification from regulators to enable client planning.
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Pillar 2 (Global Minimum Tax) Alignment: The Act amends the Multinational Enterprise (Minimum Tax) Act 2024 to align with the latest OECD Administrative Guidance (June 2024) on the GloBE Model Rules. Impact: This ensures Singapore’s Domestic Minimum Top-up Tax (DMTT) and Income Inclusion Rule (IIR) framework remains OECD-compliant. Practical Issue: In-scope MNEs must review their Pillar 2 calculations and compliance processes to reflect these codified guidance updates.
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GST Procedural Adjustment: Section 56 of the GST Act is amended to allow the disclosure of a taxpayer’s name in published Board of Review proceedings, subject to taxpayer consent. This modifies previous confidentiality norms.
Action Required:
Tax and accounting professionals should:
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Review the Act’s full text for precise legislative wording.
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Immediately assess the impact of YA 2025 rebates on current-year tax positions.
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Begin evaluating client eligibility for the new deductions (innovation, equity remuneration, green credits).
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Monitor for implementing regulations, particularly for the green credit and listing rebate schemes.
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Ensure MNE clients’ Pillar 2 readiness is informed by these latest legal amendments.
Source: Government Gazette, 9 December 2025