MOF Invites Feedback On Proposed Changes To The Income Tax Act

1. The Ministry of Finance is inviting interested parties to provide feedback on the draft Income Tax (Amendment) Bill 2019 from 19 June to 10 July 2019.

Proposed Amendments arising from Budget 2019

2. The proposed amendments to the Income Tax Act (“ITA”) include 7 changes announced in the 2019 Budget Statement. The key changes are:

a. Personal Income Tax Rebate. As part of the Bicentennial Bonus, a Personal Income Tax Rebate of 50% of tax payable capped at $200 will be granted to all tax resident individuals for Year of Assessment (“YA”) 2019 (i.e. for income earned in 2018).

b. Lapse the Not Ordinarily Resident ("NOR") Scheme. Introduced in Budget 2002, the NOR scheme will lapse after YA 2020. The last such NOR status will be granted for YA 2020 and expire in YA 2024. Individuals who have been accorded the NOR status and continue to meet the conditions will continue to be granted NOR tax concessions until their status expires.

c. Extend and refine the tax incentive schemes for funds managed by Singapore-based fund managers. To continue to grow Singapore’s asset management industry, the tax concessions relating to qualifying funds under Sections 13CA/ 13R/ 13X of the ITA will be extended till 31 December 2024 along with refinements to the scheme parameters.

Other Proposed Amendments

3. The Income Tax (Amendment) Bill 2019 also provides for 12 changes to existing tax policies and administration, arising from the periodic review of Singapore’s income tax system. The changes include introducing a prescribed deemed expense ratio for tax resident individuals who are self-employed commission agents (i.e. general commission agents, insurance agents, real estate agents, and remisiers) earning gross annual commission income of up to $50,000 in respect of which there are deductible outgoings or expenses. To ease tax compliance, these commission agents will be allowed to claim tax deduction based on either (i) a prescribed deemed expense ratio, set at 25% of gross commission income; or (ii) the actual amount of expenses incurred in the production of their commission income. This will be effective from YA 2020, i.e. in respect of income earned in 2019.

4. The remaining two changes are technical amendments.

Consultation Details

5. The public can access the detailed consultation documents for the draft Income Tax (Amendment) Bill 2019 on the Ministry of Finance's website and the REACH consultation portal.

6. We encourage all interested parties to submit your comments using the prescribed template (95 KB), through:

a) email to pc_itabill@mof.gov.sg (preferred mode); or

b) fax to 6337 4134; or

c) post to:

Ministry of Finance

100 High Street, #10-01

The Treasury

Singapore 179434

Attention: Tax Policy Directorate

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Issued by Ministry of Finance
Singapore
19 June 2019