General tax changes
Minimum Effective Tax Rate (METR) Regime
- Singapore is exploring a top-up tax called METR due to Pillar 2 of BEPS 2.0
- METR will top up multinational enterprise (MNE) group's effective tax rate in Singapore to 15%
- Will apply to MNE groups in Singapore with annual revenues of at least €750 million in consolidated financial statements of ultimate parent entity
- METR will be studied further and industry stakeholders consulted on its design
Enhance Tax Incentive Scheme for Qualifying Funds
- Conditions imposed on investments in physical Investment Precious Metals (IPMs) under designated investments list will be refined on and after 19 February 2022:
– Investments in physical IPMs need not be incidental to trading of derivative IPMs; and
– Cap will be revised to 5% of total investment portfolio for incentive awards under Sections 13D/13O/13U of ITA
- MAS will provide further details by 31 May 2022
Increase in property tax rates for non-owner-occupied residential properties
- Increase applies to all non-owner-occupied residential properties
- 1 January 2023: Top marginal rate increases from 20% to 27%
- 1 January 2024: Top marginal rate increases from 27% to 36%
Additional Registration Fee (ARF) increase
- New ARF tier of 220% introduced for portion of Open Market Value above $80K
Disclosure of company-related information for official duties
- Where taxpayers have provided consent, the Inland Revenue Authority of Singapore (IRAS) can disclose such information to a public officer
- The IRAS can also disclose prescribed list of identifiable information on companies to public sector agencies for performance of official duties without need for taxpayer’s consent
- Changes will be made to Income Tax Act (ITA) and Goods and Services (GST) Act
Increase in property tax rates for owner-occupied residential properties
- Increase applies to owner-occupied residential properties with annual value above $30k
- 1 January 2023: Top marginal rate increases from 16% to 23%
- 1 January 2024: Top marginal rate increases from 23% to 32%
Insurers' basis of preparation of tax computation changed to align to Monetary Authority of Singapore (MAS) Statutory Returns
- MAS Statutory Returns used instead of Financial Statements with adoption of Financial Reporting Standard 117
- Takes effect from Year of Assessment (YA) 2024 (or YA 2025 for insurers whose financial year end is not 31 December)
- IRAS to provide further details by 30 September 2022
Increase in personal income tax rates from YA 2024
Tax Resident – new chargeable income tiers & rates
- $500,001 – $1,000,000: 23%
- In excess of $1,000,000: 24%
Non-Tax Resident
- Tax rate increased from 22% to 24% [other than employment income and certain income taxable at reduced withholding tax (WHT) rate]
Increase in carbon tax
- From now until 2023 - Current tax of $5 per tonne will remain unchanged
- For 2024 and 2025 – Increase from $5 to $25 per tonne
- For 2026 and 2027 – Increase from $25 to $45 per tonne
- By 2030 – Increase from $45 per tonne to range of 50 to $80 per tonne
Change in basis of zero-rating for travel arranging services
Currently, travel arranging services are zero-rated if the services comprise the arrangement of international transport of passengers, arrangement of insurance related to such transport and arrangement for accommodation in property located outside Singapore.
From 1 January 2023, zero-rating will only apply where:
i. The contractual customer belongs outside Singapore; and
ii. The direct beneficiary belongs outside Singapore or is GST-registered in Singapore
GST rate hikes
- Increase to 8% with effect from 1 January 2023
- Increase to 9% with effect from 1 January 2024
Withdrawals
WHT exemption for financial sector
- WHT exemption for payments made under interest rate or currency swap transactions by financial institutions to lapse after 31 December 2022
- Such payments can be covered under existing WHT exemption for payments on over-the-counter financial derivatives
- MAS to provide further details by 31 May 2022
Tax Incentives for Project and Infrastructure Finance
- Approved Infrastructure Trustee-Manager/Fund Management Company from managing qualifying SGX-listed Business Trusts/Infrastructure funds in relation to qualifying infrastructure projects/assets (ITMFM) scheme to lapse after 31 December 2022
- Existing ITMFM scheme recipients will continue to enjoy the tax benefits for the remaining tenure of their existing awards
- MAS to provide further details by 31 May 2022
Integrated Investment Allowance Scheme
To lapse after 31 December 2022
Enhancements and extensions
Aircraft Leasing Scheme
Extended till 31 December 2027
Tax Framework for Facilitating Corporate Amalgamation under Section 34C of the ITA to Licensed Insurer
- Extended to cover amalgamation of Singapore-incorporated companies involving a scheme of transfer under Section 117 of the Insurance Act 1966 (IA), where the court order for confirmation of the scheme referred to under Section 118 of the IA is made on or after 1 November 2021
- Subject to conditions
- IRAS will provide further details of the changes by 31 October 2022
WHT exemption for ship and container lease payments under finance lease agreements for Maritime Sector Incentive recipients
- Extended to cover agreements entered into on or before 31 December 2028
Approved Royalties Incentive
- Simplified to cover classes of royalty agreements based on activity-set-based approach
- Economic Development Board to provide further details by 30 June 2022
Extended till 31 December 2028
Approved Foreign Loan scheme
Extended till 31 December 2028
WHT exemption for container lease payments made to non-tax resident lessors under operating lease agreements
Extended to cover agreements entered into on or before 31 December 2027
Tax incentives for Project and Infrastructure Finance
- Existing tax incentive schemes on exemption of qualifying income for qualifying project debt securities (QPDS) and qualifying offshore infrastructure projects/assets were to lapse after 31 December 2022
- Extended till 31 December 2025 and MAS to provide further details by 31 May 2022
WHT exemption for financial sector
- Certain payments made under interest rate or cross currency swap transactions, interest payments on certain margin deposits and specified payments made under securities lending or repurchase agreement were to lapse after 31 December 2022
Extended till 31 December 2026 and MAS to provide further details by 31 May 2022
WHT exemption for non-resident mediators
- Extended till 31 March 2023
- Concessionary WHT rate of 10% (subject to conditions) on gross income from 1 April 2023 to 31 December 2027 or 24% on net income from YA 2024 onwards
WHT exemption for non-resident arbitrators
- Extended till 31 March 2023
- Concessionary WHT rate of 10% (subject to conditions) on gross income from 1 April 2023 to 31 December 2027 or 24% on net income from YA 2024 onwards