Singapore: Tax Updates in YA 2024

1a. Provide an option to accelerate the write-off of the cost of acquiring Plant and Machinery (P&M)

Businesses that incur capital expenditure on the acquisition of P&M in the basis period for YA 2024 (i.e. financial year ended in 2023) will have an option to accelerate the write-off of the cost of acquiring such P&M over two years instead of the current 3 years period. This option, if exercised, is irrevocable.

The rates of accelerated CA allowed are as follows: 

1. 75% of the cost incurred to be written off in the first year (i.e. YA 2024); and 
2. 25% of the cost incurred to be written-off in the second year (i.e. YA 2025).

1b. Provide an option to accelerate the deduction for Renovation or Refurbishment (R&R) expenditure

Businesses that incur qualifying expenditure on R&R during the basis period for YA 2024 (i.e. financial year ending in 2023) will have an option to claim R&R deduction in one YA (i.e. accelerated R&R deduction). The cap of $300,000 for every relevant period of three consecutive YAs will still apply. This option, if exercised, is irrevocable.

2. Voluntary Disclosure Programme (VDP) Updates

The Inland Revenue Authority of Singapore (IRAS) has updated e-Tax Guide to clarify the qualifying conditions which are pre-requisites to enjoy reduced or waiver of penalty, and to present the voluntary compliance initiatives applicable to each type of tax. The voluntary compliance initiatives will enable taxpayers to enjoy an extended grace period or waiver of penalties for voluntarily disclosure of errors. 

3. Tax Governance Framework (TGF) and Tax Risk Management and Control Framework for Corporate Income Tax (CTRM) under VDP

The newly added section on Tax Governance Framework (TGF) and Tax Risk Management and Control Framework for Corporate Income Tax (CTRM) provided details on extended grace period and some examples of relevant companies in the respective sectors.

4. Updates on CbCR

Singapore signed the Multilateral Competent Authority Agreement (MCAA) on the exchange of Country-by-Country (CbC) Reports on 21 June 2017. With this, Singapore-headquartered multinational enterprise (MNE) groups that meet the requirements will need to file CbC Reports to the Inland Revenue Authority of Singapore (IRAS) within 12 months from the end of their financial year. The CbC Reports will be provided to the tax authorities of jurisdictions with which Singapore has established bilateral Automatic Exchange of Information (AEOI) relationships under the MCAA. Such CbC Report may be used by different tax jurisdictions to evaluate transfer pricing risks and other Base Erosion and Profit Shifting (BEPS) related risks. In the latest update on 19 January 2024, Kenya and Montserrat were added into the list of jurisdictions that have exchange relationships with Singapore, making up a total of 91 jurisdictions as off January 2024.

5. Automatic Exchanges in Crypto-Assets Reporting

Singapore joins 47 other jurisdictions to work towards commencing automatic exchanges in crypto-assets reporting based on the internationally agreed Crypto-Asset Reporting Framework (CARF) in 2027 and abides by the international standards for Exchange of Information for tax transparency.

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Reference/ Citation

Inland Revenue Authority of Singapore

https://www.iras.gov.sg/