On or about 18 Feb 2022, the Minister for Finance, Mr. Lawrence Wong, delivered his Budget Statement for the Financial Year 2022.
Extend the broad-based withholding tax (“WHT”) exemption for container lease payments made to non-tax-resident lessors under operating lease agreements
This exemption is scheduled to lapse after 31 December 2022.
To continue supporting the local demand for containers, container lease payments made to non-tax-resident lessors under operating lease agreements entered into on or before 31 December 2027 will be exempted from withholding tax.
Extend the broad-based WHT exemption for ship and container lease payments under finance lease agreements for Maritime Sector Incentive (“MSI”) recipients
This WHT exemption is scheduled to lapse after 31 December 2023.
To continue developing Singapore as an international maritime centre, ship and container lease payments made by specified Maritime Sector Incentive (MSI) award recipients to non-resident lessors (excluding payments derived from any operation carried on by the non-resident through its permanent establishment in Singapore) under finance lease agreements entered into on or before 31 December 2028 will be exempted from withholding tax.
Extend the Aircraft Leasing Scheme
The Aircraft Leasing Scheme (ALS) is scheduled to lapse after 31 December 2022.
To continue encouraging the growth of the aircraft leasing sector in Singapore, the Aircraft Leasing Scheme will be extended till 31 December 2027.
Under the ALS, approved aircraft lessors and aircraft investment managers enjoy the following tax benefits:
- a concessionary tax rate of 8% on income derived by approved aircraft lessors from the leasing of aircraft or aircraft engines and qualifying ancillary activities
- a concessionary tax rate of 10% on income derived by approved aircraft managers from managing an approved aircraft lessor and qualifying activities, and
- automatic withholding tax exemption on qualifying payments made by approved aircraft lessors to non-residents (excluding a permanent establishment in Singapore) in respect of qualifying loans and finance leases entered into to finance the purchase of aircraft or aircraft engines, subject to conditions.