The Finance (Income Taxes) Bill (No. 16/2025) was tabled for its first reading in Parliament on 14 October 2025. The Bill proposes amendments to three key statutes:
- Income Tax Act 1947 (ITA)
- Multinational Enterprise (Minimum Tax) Act 2024 (MMTA)
- Goods and Services Tax Act 1993 (GSTA)
This legislative package operationalises several Budget 2025 measures while also introducing new policy items not previously consulted on.
1. Corporate and Individual Tax Measures
1.1 Corporate Income Tax (CIT) Rebate and Cash Grant (YA 2025)
The Bill legislates a CIT Rebate and a CIT Rebate Cash Grant for eligible companies.
Key Impacts and Practical Issues
- Companies must assess eligibility and compute the rebate during YA 2025 filing.
- Interactions with existing tax incentives (e.g., partial tax exemption, pioneer incentives) must be evaluated to avoid misstatements.
- Cash grant recognition may require financial reporting judgement under SFRS(I) 20.
1.2 Personal Income Tax Rebate (YA 2025)
A one-off rebate is introduced for individual taxpayers.
Practical Considerations
- Payroll vendors and employers should prepare for increased employee queries.
- Could affect year-end tax equalisation calculations for mobile employees.
1.3 Deduction for Innovation Cost-Sharing Agreements
Payments under an approved cost-sharing agreement for innovation activities will become deductible.
Impacts
- This facilitates cross-border R&D funding within groups, aligning with OECD guidance.
- Documentation standards will be critical—especially allocation keys, arm’s-length support, and innovation project substantiation.
Practical Issues
- Taxpayers must track whether agreements meet the “approved” criteria and maintain evidence of nexus to innovation outcomes.
1.4 Deduction for Employee Equity-Based Remuneration – Issuance Costs
A new deduction is introduced for costs incurred by holding companies in issuing new shares under equity-remuneration schemes.
Impacts
- Reduces after-tax cost of stock-based compensation.
- Aligns tax treatment more closely with commercial practice.
Practical Issues
- Entities must separate issuance-related costs from other administrative costs.
- Requires careful tracking by HR, finance, and share plan administrators.
1.5 Listing CIT Rebate for New Corporate Listings
A new incentive to support corporate listings in Singapore.
Impacts
- Aims to enhance capital market competitiveness.
- Pre-listing financial modelling should incorporate expected rebate effects.
Practical Issues
- Companies must verify listing eligibility dates and conditions during IPO planning.
- Interaction with group restructuring prior to listing must be reviewed.
2. New Non-Budget Measure: Deduction for Green Certificates (From YA 2026)
The Bill introduces a deduction for surrendering prescribed green certificates or green credits, applicable from YA 2026 onward. Notably, this was not part of the public consultation (18 June–11 July 2025).
Impacts
- Creates tax support for environmental compliance and voluntary sustainability actions.
- Likely to spur demand for government-approved certificates or credits.
Practical Issues
- Taxpayers require clarity on:
- what qualifies as “prescribed” certificates,
- valuation rules upon surrender,
- timing of deduction claims.
- Potential financial reporting implications if certificates are recognised as intangible assets or inventory.
3. Amendments to the Multinational Enterprise (Minimum Tax) Act (MMTA)
The Bill updates the MMTA to incorporate OECD administrative guidance released on 17 June 2024 under Pillar Two Global Anti-Base Erosion (GloBE).
Impacts
- Ensures Singapore’s Pillar Two rules remain aligned with evolving OECD standards.
- MNE groups must re-evaluate Effective Tax Rate (ETR) calculations and Top-up Tax modelling.
Practical Issues
- Complexity expected around safe harbours, transitional relief, and revised guidance.
- Tax engines and consolidation systems may require re-configuration.
- Newly updated definitions or administrative rules may affect:
- treatment of uncertain tax positions,
- qualified domestic minimum top-up tax (QDMTT) computation,
- cross-border data collection.
4. Amendments to the Goods and Services Tax Act (GSTA)
Section 56 will be amended to allow the publication of a taxpayer’s name for matters heard in private before the GST Board of Review, subject to taxpayer consent.
Impacts
- Introduces greater transparency in dispute outcomes.
- May influence taxpayers’ willingness to consent depending on reputational considerations.
Practical Issues
- Taxpayers in disputes should incorporate naming considerations in litigation strategy.
- Tax advisers may need updated client communication protocols.
The Finance (Income Taxes) Bill (No. 16/2025) introduces wide-ranging changes with material impacts on compliance, tax planning, financial reporting, and operational processes. While many measures stem from Budget 2025, new unannounced policy items—such as the green certificate deduction—create additional areas for taxpayer analysis.
Early preparation and system updates are recommended, particularly for MNEs affected by evolving Pillar Two rules and companies planning innovation activities, share-based compensation, or public listings.
Source: Government Gazette, 16 October 2025.