Singapore Budget 2015: Brief Highlights

TAXATION FOR INDIVIDUALS 

Marginal Tax Rates The Marginal tax rate will increase for high-income earners with chargeable income above S$320,000, the marginal tax rate for the additional income will be increased to 22% from 20%. It will apply on income earning in year 2016 and on taxes to be paid in year 2017. The personal income tax rate structure is as follows:

The changes to the personal tax rates are made to enhance progressively of our personal income tax rate regime and strengthen future revenues.

Simplified claim for rental expenses for Individuals

To simplify tax filing and reduce the burden of record keeping, apply on passive rental income deriving from year 2015 onwards, the individual taxpayers may opt to claim the rental expenses based on 15% of the gross rental income derived from the residential property. It will be claimed against the gross rental income in lieu of the actual amount of deductible expenses (excluding interest expense). 

In addition to 15%, the individual taxpayers may claim interest on the loan obtained wholly and exclusively for acquiring and enhancing that leased property. 

Tax Exemption for non-tax resident ediators 

In order to promote Singapore’s commercial mediation sector, income derived by a non-resident mediator (stayed or worked in Singapore for less than 183 days) for mediation work performed in Singapore for the period from 01 May 2015 to 31 March 2020 will be exempted from tax if: 

a. The mediator is a non-resident of Singapore for income tax purposes; 

b. The mediator is certified under an approved certification scheme/conducts mediation administered by a designated mediation service provider; and 

c. The mediation case is undertaken in Singapore or was planned to be undertaken in Singapore but was settled before the mediation hearing. 

The Singapore International Mediation Institute and the Singapore International Mediation Center will assist in determining whether a non-resident mediator is eligible for tax exemption.

Personal Income Tax Rebate 

All tax residents individuals are given a personal income tax rebate of 50% of tax payable, capped at S$1,000.00 per taxpayer who earned chargeable income for the period from 01 January 2014 to 31 December 2014. 

TAXATION FOR BUSINESSES 

Corporate Income Tax Rebate 

Companies will be granted a 30% corporate income tax rebate for Years of Assessment (“YA”) 2016 and 2017 at a reduced cap of S$20,000 per company per YA, to alleviate high cost of doing business.

Productivity Innovation Credit (“PIC”) Scheme 

As the PIC Scheme has been extended to Year of Assessment (“YA”) 2018, all businesses can continue till YA 2018 to enjoy 400% tax deductions/allowances and/or 60% cash payout (i.e. 60% of qualifying cost incurred) for investments made in any of the Six Qualifying Activities as follows: 

a) Acquisition and Leasing of PIC IT and Automation Equipment 

b) Training of Employees 

c) Acquisition and Licensing of Intellectual Property Rights (IPR) 

d) Registration of Patents, Trademarks, Designs and Plant Varieties 

e) Research and Development (R&D) Activities 

f) Design Projects Approved by Design Singapore Council 

Wage Credit Scheme (“WCS”) 

The WCS will be extended for two more years (i.e. years 2016 and 2017). The Government will cofund 20% instead of 40% of wage increase given to Singaporean employees earning a gross monthly wage of S$4,000 and below. 

In addition, for wage increases given in 2015 which are sustained in 2016 and 2017 by the same employer, employers will continue to receive co-funding at 20% for 2016 and 2017. 

TAX DEDUCTION FOR INDIVIDUALS AND BUSINESSES 

Enhanced tax deduction for Approved Donation 

Donations made to an approved Institution of a Public Character or Singapore Government for causes that benefit the local community are deductible donation. The current tax deduction for qualifying donations is 2.5 times of the amount of donation made. 

In conjunction with the 50th birthday of Singapore, the tax deduction for qualifying donations will be 3 times of the amount of donation made from 01 January 2015 to 31 December 2015.

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