Public Consultation on Proposed Income Tax (Amendment) Bill 2024

INTRODUCTION

    The Ministry of Finance is proposing 22 legislative amendments to the Income Tax Act 1947 (“ITA”) to effect: (i) tax measures announced in the 2024 Budget Statement on 16 February 2024 (15 amendments); and (ii) changes arising from MOF’s periodic review of Singapore’s income tax regime to better reflect policy objectives and to improve tax administration (seven amendments).

2.   The Ministry is seeking public feedback on the proposed Income Tax (Amendment) Bill 2024, which provides for these proposed amendments, from 10 June to 5 July 2024.

SCOPE OF THE CONSULTATION

Budget 2024 amendments

3.   There are 15 proposed amendments to effect measures announced in the 2024 Budget Statement on 16 February 2024. Key amendments include the following:

a.   Corporate Income Tax (“CIT”) Rebate, with a CIT Rebate Cash Grant for eligible companies. To help companies manage rising costs, a CIT Rebate of 50% of tax payable will be granted for Year of Assessment (“YA”) 2024. Companies that have employed at least one local employee in 2023 will receive a minimum benefit of $2,000 in the form of a cash payout. The maximum total benefit that a company may receive is $40,000.

b.   Refundable Investment Credit (“RIC”). To enhance Singapore’s attractiveness for investments, MOF will introduce the RIC, which will support up to 50% of qualifying expenditures for qualifying activities on an approval basis. The credits are to be offset against CIT payable. Any unutilised tax credits will be refunded to the company in cash within four years. 

c.   Personal Income Tax (“PIT”) Rebate. In view of cost-of-living concerns, a PIT Rebate of 50% of tax payable will be granted to all tax resident individuals for YA 2024. The rebate will be capped at $200 per taxpayer.

d.   Annual income threshold for dependant-related reliefs. To allow more taxpayers who are providing for dependant family members to enjoy dependant-related reliefs, while giving dependant family members the flexibility to do some work, the annual income threshold of a qualifying dependant or caregiver will be increased from $4,000 to $8,000 with effect from YA 2025.

e.   Overseas Humanitarian Assistance Tax Deduction Scheme (“OHAS”). To encourage giving towards overseas emergency humanitarian assistance causes, the OHAS will be piloted for four years from 1 January 2025 to 31 December 2028. The OHAS will provide individual and corporate donors with 100% tax deduction for qualifying overseas cash donations made through a designated charity and towards a fundraiser for emergency humanitarian assistance with a valid Fund-Raising for Foreign Charitable Purposes permit from the Commissioner of Charities. Tax deductions under OHAS will be capped at 40% of the donor’s statutory income.

Other proposed amendments

4.   There are seven proposed amendments arising from MOF’s periodic review of Singapore’s income tax regime to better reflect policy objectives and to improve tax administration. They include the proposed amendments to: (i) expand the scope of qualifying securities lending or repurchase arrangements under section 10H of the ITA, and (ii) waive the requirement to furnish the Estimated Chargeable Income for individual sole-proprietors and partnerships from YA 2026 to YA 2030.

ITA to also be amended by proposed Multinational Enterprise (Minimum Tax) Bill

5.   The Ministry is also proposing a Multinational Enterprise (Minimum Tax) Bill to implement a Domestic Top-up Tax and the Income Inclusion Rule under Pillar Two of the Base Erosion and Profit Shifting (“BEPS”) 2.0 initiative, as announced in the 2024 Budget Statement. The proposed Multinational Enterprise (Minimum Tax) Bill will include amendments to the ITA to provide clarity and certainty on the income tax treatment of taxes imposed by Singapore and foreign jurisdictions under Pillar Two of the BEPS 2.0 initiative. These include whether these taxes are eligible for tax deduction and foreign tax credit, and whether they satisfy conditions for the foreign-sourced income exemption regime. Interested parties can access the public consultation documents for the proposed Multinational Enterprise (Minimum Tax) Bill on the Ministry of Finance's website and the REACH consultation portal.

GUIDELINES FOR SUBMISSION

6.   Respondents are requested to observe these guidelines:

a.   Please identify yourself and the organisation you represent (if any) so that we can follow up to clarify any comments if needed.

b.   Be clear and concise in your comments, and use the template provided to organise your feedback.

c.   Focus your comments on how the drafting of the proposed legislative amendments for the tax measures announced at Budget 2024 can be better written to make them clearer and to make compliance easier; or on how the non-Budget changes and drafting can be improved.

d.   As far as possible, explain your points with illustrations, examples, data or alternative formulations of the amendments.

7.   This proposed legislation is released only for the purpose of consultation and should not be used for individual or business decisions as it does not represent the final legislation.

8.   All comments received during the consultation will be reviewed thoroughly and if accepted, will be incorporated in the Bill for introduction in Parliament.

FEEDBACK CHANNEL

9.   We request that all interested parties submit your comments using the template, through email to pc_itabill@mof.gov.sg.

SUMMARY OF RESPONSE

10.   We will publish a summary of the main comments received on the Ministry of Finance’s website, together with our responses, in September 2024. The identities of respondents will not be disclosed in the summary.

DOCUMENTS TO DOWNLOAD

11.   Please refer to the proposed Income Tax (Amendment) Bill 2024 and its accompanying Explanatory Statement for details. The Annexes provide a brief description of the 22 proposed amendments.

12.   Please click on the links below to download the relevant documents for this public consultation.

Documents to Download

Income Tax (Amendment) Bill 2024

• Entire Bill

• Clause 1 to 35

• Explanatory Statement

Annexes

• Annex A: Proposed Amendments Announced in the 2024 Budget Statement

• Annex B: Proposed Non-Budget Amendments

Template for Submission of Comments

Other useful references:

• You may obtain a copy of the ITA at https://sso.agc.gov.sg.

• For more details on the tax changes, you may refer to the circulars on IRAS’ website.