Singapore: Tax measures in budget 2023
Proposed tax measures include enhanced tax deduction schemes and progressive property and vehicle taxes
Proposed tax measures include enhanced tax deduction schemes
Singapore’s budget for 2023, presented 14 February 2023, includes the following proposed tax measures—from enhanced tax deduction schemes to progressive property and vehicle taxes.
- Option to accelerate capital allowances on plant and machinery: Taxpayers who incur capital expenditure on plant and machinery during the basis period for year of assessment (YA) 2024 would have an option to accelerate capital allowances over two years (i.e., 75% in YA 2024 and 25% in YA 2025) with no deferment of claims. This option, if exercised, is irrevocable.
- Enterprise innovation scheme: A new scheme valid from YA 2024 to YA 2028 would provide 400% tax deductions/allowances on certain qualifying expenditures.
- Increase in buyers’ stamp duty rates: An increase in the rates for residential and non-residential properties would be applicable to acquisitions on or after 15 February 2023.
- Increase in additional registration fee: The increase would be applicable to vehicles registered with certificate of entitlements (COEs) obtained from second COE bidding exercise in February 2023 (new rates would apply on or after 15 February 2023 for vehicles that do not need COE).
- Philanthropy tax incentive scheme for family offices: A new tax incentive scheme would be introduced for qualifying donors with family offices operating in Singapore.
- Implementation of GloBE rules and domestic top-up tax: Singapore plans to implement the global anti-base erosion (GloBE) rules and domestic top-up tax from the financial year starting on or after 1 January 2025.
- Option to accelerate deduction for renovation or refurbishment expenditure: Taxpayers who incurred qualifying renovation or refurbishment (R&R) expenditure during the basis period for YA 2024 would have an option to claim R&R deduction over one YA (instead of three YAs). The cap of $300,000* for every relevant three-year period would continue to apply. This option, if exercised, is irrevocable.
- Increase in excise duties for all tobacco products: Excise duties for all tobacco products would be increased by 15% with effect from 14 February 2023.
Read a February 2023 report prepared by the KPMG member firm in Singapore
*$ = Singapore dollar
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