Key Summary For Tax Singapore Changes in Budget 2021
After an unprecedented and challenging year caused by the COVID-19 pandemic outbreak where a record of four budgets have to be presented, will singapore introduce any new tax singapore or radical tax measures for businesses and individuals to steer the economy back to sustainable growth? Will the implementation date of the highly anticipated GST hike be revealed.
In addition to sharing the major highlights of Budget 2021, Singapore concerns how businesses and individuals can take advantage of any new tax singapore planning opportunities presented by any new tax measures. This full day webinar will also discuss the recent significant developments in tax singapore.
Option to Accelerate the Write-Off of the Cost of Acquiring Plant and Machinery
The option to accelerate the write-off of the cost of acquiring qualifying plant and machinery will be extended to qualifying capital expenditure incurred on the acquisition of plant and machinery in the basis period for YA 2022 i.e. financial year (FY) 2021. This will help to ease the cashflow of businesses that intend to purchase new assets.
Under the accelerated option, businesses can claim capital allowance of 75% of the qualifying cost incurred in the first year and 25% of the qualifying cost incurred in the second year. No deferment of the capital allowance claim is allowed under this option.
Option to Accelerate the Deduction of Expenses Incurred on Renovation and Refurbishment (“R&R”)
Generally, expenditure incurred on renovation and refurbishment (R&R) works that relate to the business setting (e.g. electrical installation, lighting works, flooring works, etc) do not qualify for capital allowances. However, taxpayers who incur prescribed R&R expenditure for the purposes of their trade, profession or business may claim tax singapore deduction on those R&R costs over three consecutive YAs, subject to an expenditure cap of S$300,000 for every relevant three-year period.
For qualifying R&R costs incurred during YA 2021 (i.e. FY 2020), taxpayers were given the option to claim R&R deduction in one YA. The option to claim R&R deduction in one YA will be extended to qualifying expenditure incurred on R&R in the basis period for YA 2022
Tax Singapore Changes to Enhanced Carry-Back Relief Scheme
Under the normal carry-back relief scheme, current year unabsorbed capital allowances and trade losses (collectively referred to as ‘qualifying deductions’) may be carried back to the immediate preceding year of assessment (YA). In last year’s Budget, the carry-back relief scheme was enhanced to allow the qualifying deductions for YA 2020 to be carried back up to three immediate preceding YAs, subject to conditions.
The enhanced carry-back relief scheme will be extended to apply to qualifying deductions for YA 2021. With this extension, qualifying deductions for YA 2021, subject to conditions, may be carried back up to three immediate preceding YAs. As the amount of qualifying deductions that can be carried back remains capped at S$100,000 (approximately US$74,460), this measure will benefit smaller businesses the most.
Tax Singapore Changes for Business and IPC Partnership Scheme (BIPS)
Currently, businesses carrying out a trade or business in Singapore can, subject to conditions, enjoy a total of 250% tax singapore deduction on qualifying expenditure incurred from 1 July 2016 to 31 December 2021 in respect of:
– The provision of services by the businesses’ qualifying employee to an IPC during that period; or
– The secondment of the businesses’ qualifying employee to an IPC during that period.
• The qualifying expenditure is subject to a cap of S$250,000 per business per YA. A qualifying expenditure cap of S$50,000 is also imposed on each IPC per calendar year.
• The BIPS will be extended to 31 December 2023
Tax Singapore Deduction for Qualifying Donations
TO encourage charitable giving and corporate volunteerism, the Singapore government will extend tax singapore deductions and a number of initiatives to assist charities.
To continue encouraging philanthropism within the community, the 250% tax deduction for qualifying donations made to institutions of a public character (IPCs) and other qualifying recipients will be extended to December 31 2023.
