1. 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.
2. Providing an option to accelerate the deduction of qualifying expenditure incurred on renovation and refurbishment for YA 2021 in one YA instead of over three consecutive YAs as currently allowed, subject to an expenditure cap of S$300,000.
3. The double tax deduction for internationalization (DTDi) scheme provides 200% tax deduction on qualifying expenditure from prescribed activities undertaken by businesses to internationalize. To keep up with the changes in the business environment due to COVID-19, the scope of qualifying expenses under the DTDi scheme will be enhanced to cover specified expenses incurred to participate in virtual trade fairs that are approved by Enterprise Singapore. The list of qualifying expenses for overseas investment study trips will also be expanded to include logistics costs to transport materials/samples used during the investment trips.
4. Extending the M&A scheme to cover qualifying acquisitions made on or before 31 December 2025.
5. The not-for-profit organization (NPO) tax incentive provides tax exemption on the income derived by an approved NPO and is scheduled to lapse after March 31 2022. The NPO tax incentive will be extended till December 31 2027.
6. 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. 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, this measure will benefit smaller businesses the most.
7. It was announced that the planned goods and services tax (GST) rate increase from 7% to 9% will happen between 2022 to 2025. The timing of the increase will be subject to the economic outlook.
8. With effect from January 1, 2023, GST will be extended to low-value goods which are imported via air or post and B2C imported non-digital services. The implementation details will be finalized after the Inland Revenue Authority of Singapore has consulted the industry.
9. Extending Section 13Z (which provides for upfront certainty of non-taxation of companies’ gains on disposal of ordinary shares subject to certain conditions) to cover disposals of ordinary shares by companies from 1 June 2022 to 31 December 2027. In addition, to ensure consistency in the tax treatment for property-related businesses, the scheme has been tweaked to exclude disposals made on or after 1 June 2022 of unlisted shares in an investee company that is in the business of trading, or principally carries on the activity of holding immovable properties, or had undertaken certain property development.
10. To ensure no double incentivization, for capital grants approved on or after 1 January 2021, recipients will not be allowed to claim tax deductions or allowances on that part of the expenditures that are funded by such grants from the Government or statutory boards.
11. In a move that reaffirms Singapore’s position against tax avoidance, the newly legislated provision repeals and re-enacts the general anti-avoidance provisions and introduces a 50% surcharge to be imposed on any adjustments made by the Inland Revenue Authority of Singapore (IRAS) under the anti-avoidance legislation. Similar measures have been legislated for GST and Stamp Duty. The surcharge will come into effect from YA 2023.
12. A new Section 13ZA has been legislated to exempt from tax certain payments that are made in connection with the COVID-19 pandemic. These include:
a. Payments made in connection with various public schemes established to mitigate the impact of COVID-19 events on persons, such as the Jobs Support Scheme and COVID-19 quarantine order allowance scheme payout.
b. Employment benefits for accommodation, food, transport and daily necessities for consumption or use in Singapore, and allowances for such accommodation or basic necessities, that are provided by an employer to an employee, subject to prescribed conditions.
c. Property tax rebate and rental relief measures.