Singapore Budget 2011

Singapore’s Finance Minister, Mr Tharman Shanmugaratnam unveiled the 2011 Budget on 18 February 2011. The focus of this year's budget aims to strengthen both Singapore's economy and society for the future. The core agenda is to grow Singaporeans' income significantly by transforming productivity. To achieve this cause, the government is investing substantial resources so as to achieve a 30% improvement in real median income over the next decade.

Tax changes that will directly impact businesses for Year of Assessment (“YA”) 2011:

• rebate of 20% of YA 2011 corporate income tax payable, capped at S$10,000
• small companies that pay very little tax will get a one-off SME cash grant which will be based on 5% of the company’s revenue for YA 2011, subject to a cap of S$5000

To boost productivity, the Productivity and Innovation Credit Scheme confers 250% tax deduction or allowance for the firstS $300,000 of qualifying expenses incurred on each of the 6 qualifying activities along the innovation value chain, namely: R&D Expenditures, Investments in Design, Acquisition of Intellectual Property (IP), Registration of IP,  Investments in Automation and Training. This is effective from YA 2011 to YA 2015 with combined expenditure cap of S$600,000 for each of the qualifying activity for YA 2011 and YA 2012.

For YA 2011 to YA 2013, businesses can elect to convert up to S$300,00 qualifying tax deductions or allowances into cash payout of up to $21,00 for each YA.