SINGAPORE BUDGET SEMINAR 2019

26 February 2019, Tuesday

HIGHLIGHTS OF THE 2019

BUDGET MEASURES

26/2/2019

Highlights of the 2019 Budget Measures

26/2/2019

1. Corporate Tax

2. Personal Tax

3. Goods and Services Tax

4. Grants

5. Enablers for Firms to Scale-Up, Automate, Innovate and Go Global

Corporate Tax

• Headline corporate tax rate – remains 17%

• Partial Tax Exemption (“PTE”) remains

Up to YA 2019 From YA 2020

Chargeable income %Tax exempt Amount

Tax exempt

First S$10,000 @75% = S$7,500

Next S$290,000 @50% = S$145,000

Total S$300,000 = S$152,500

Chargeable income %Tax

exempt

Amount

Tax exempt

First S$10,000 @75% = S$7,500

Next S$190,000 @50% = S$95,000

Total S$200,000 = S$102,500

26/2/2019

26/2/2019

Corporate Income Tax (“CIT”) Rebate

YA 2019

• 20% of tax payable

• Capped at S$10,000

YA 2020

• No CIT Rebate

26/2/2019

Writing-down allowance (“WDA”) for acquisition of qualifying intellectual property

rights (“IPRs”) – Section 19B

Current

• Capital expenditure incurred on qualifying IPRs

• Available up to Year of Assessment (“YA”) 2020

• WDA claimed over a period of five, 10, or 15 years*

Proposed

• Extended to YA 2025

*Irrevocable election at point of filing tax return for the YA

26/2/2019

Automation Support Package (“ASP”)

Current

• First offered in Budget 2016 from 1 April 2016 to 31 March 2019

• To support companies deploying large-scale automation projects to drive productivity

and scale up

• Three components – grant, tax and loan

Proposed

• ASP will be extended by two years up to 31 March 2021

26/2/2019

Grant*

• Cash funding up to 50% of qualifying automationproject cost

• Typically covers consultancy fees, training expenses, certification and equipment costs.

• Grant is capped at $1 million.

100% investment allowance

• In addition to the 100% capital allowance for plant and machinery

• Up to $10 million of approved capital expenditure (net of grant)

Improved access to loans

• Government risk-share [70% for Small & Medium Enterprises (“SMEs”) / 50% non-SMEs] with participating financial institutions

• Local Enterprise Finance Scheme (LEFS) – SME Equipment and Factory Loan of up to $15 million

Recap:

*Previously under the Capability Development Grant and now under the Enterprise Development Grant

Personal Tax

26/2/2019

• No change to the progressive tax rates for Singapore tax residents

• Top marginal tax rate remains at 22%

Personal tax rebate

• YA 2018 – None

• YA 2019 – 50% of tax payable, capped at $200

26/2/2019

Grandparent Caregiver Relief

Current

• Working mothers who engage the help of their parents, grandparents, parents-in-law or

grandparents-in-law to take care of their young children

• Child has to be 12 years old or below

Proposed

• Regardless of the child’s age, if handicapped (i.e. incapacitated by reason of physical or

mental infirmity) and unmarried, assuming all other conditions for the relief are met

• Effective from YA 2020

26/2/2019

Not Ordinarily Resident (“NOR”) scheme to lapse

Current

• NOR status granted for a five-year period

• Benefits

➢ Time apportionment of Singapore employment income – portion corresponding to

number of days spent outside Singapore for business pursuant to Singapore

employment not subject to tax

➢ Tax exemption of non-mandatory overseas pension or provident fund contributions

Proposed

• Last NOR status will be granted for YA 2020 and expire in YA 2024

• Individuals accorded NOR status will enjoy tax concessions till expiry, if conditions met

Goods and

Services Tax

(“GST”)

26/2/2019

• No change to GST standard rate of 7%

Recap: Budget 2018 announcement

• The GST standard rate is expected to increase to 9%

• Sometime in the period from 2021 to 2025

• Depends on the economic conditions, overall tax revenues collection and government

expenditure growth

26/2/2019

Tightening GST import relief for Travellers

• GST relief on goods brought into Singapore for personal use

• The GST relief limit depends on the number of hours spent outside Singapore

• Effective for travellers arriving in Singapore from 12.00 am, 19 February 2019

Time spent outside Singapore Reduced Value of goods granted GST relief

48 hours and above S$500 (down from S$600)

Less than 48 hours S$100 (down from S$150)

26/2/2019

Tightening GST import relief for Travellers (cont’d)

• GST is applicable on the value of goods in excess of the respective relief limits

• Relief does not apply to:-

➢ intoxicating liquor and tobacco

➢ goods imported for commercial purposes

26/2/2019

GST Remission for

- Singapore-listed Real Estate Investment Trusts (S-REITs) &

- Singapore-listed Registered Business Trusts (S-RBTs)

• S-REITs and S-RBTs in the infrastructure business, ship leasing and aircraft leasing sectors

• Existing GST Remission on the following:-

(a) business expenses;

(b) business expenses incurred to set up financing SPVs that are used solely to raise funds;

and

(c) business expenses of the financing SPVs mentioned in (b).

26/2/2019

GST Remission for

- S-REITs &

- S-RBTs (cont’d)

Proposed

• Existing GST Remission will be extended till 31 December 2025

• Conditions for the GST remission remain the same

• Monetary Authority of Singapore (MAS) will release further details by May 2019

Grants

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Enterprise Development Grant (“EDG”)

Capability Development Grant (CDG)

Global Company Partnership

grant (GCPG)

Enterprise Development Grant (EDG)

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Enterprise Development Grant (“EDG”)

• Projects to strengthen business capabilities, improve operational efficiencies and internationalise

• Qualifying costs supported include:-

➢ Third party consultancy fees

➢ Software and equipment

➢ Incremental internal manpower cost.

• Apply through Business grants portal

26/2/2019

Enhancements of EDG

Current

• Funding support up to 70% of qualifying costs

• Available up to 31 March 2020

• Reverted to 50% after 31 March 2020

Proposed

• Enhanced support level of up to 70% extended till 31 March 2023

• Additional qualifying condition from 1 April 2020:

➢ Businesses will also need to commit to outcomes for workers such as wage

increases

26/2/2019

Productivity Solutions Grant (“PSG”)

• Pre-scoped, off-the-shelf technology and productivity solutions

• Up to 70% of qualifying costs incurred, available up to 31 March 2020

• After 31 March 2020, funding support would reduce to 50% for certain sectors

• Apply through Business grants portal

26/2/2019

PSG

Proposed

• Enhanced support level of up to 70% extended till 31 March 2023

• Enhanced to support worker upgrading until 31 March 2023

➢ Out-of-pocket training expenses not already subsidised

➢ Capped at S$10,000 per company

• Further details by Ministry of Trade and Industry and Ministry of Education’s

Committee of Supply

Enablers for Firms to Scale Up,

Innovate, Automate and Go Global

26/2/2019

Enablers for Firms to Scale Up, Innovate, Automate and Go Global

• The Singapore Government will help firms to scale up, innovate, automate and venture

into new markets by providing support in three areas:-

➢ Providing customized assistance

➢ Providing better financing options

➢ Supporting technology adoption

26/2/2019

Enablers for Firms to Scale Up, Innovate, Automate and Go Global (cont’d)

Scale-Up SG Programme• Partnership with the private and public sectors• Aspiring, high-growth local firms to identify and build new capabilities, to innovate, grow and

internationalise• Such customised support can act as an enabler for firms to scale up quickly

Innovation Agents Programme• Allow firms to tap on a pool of experts to advise them on opportunities to innovate and commercialise

technology• Individuals with deep expertise in technology, strong track record in growing businesses and access to

global industry networks will be identified by Enterprise Singapore

26/2/2019

Enablers for Firms to Scale Up, Innovate, Automate and Go Global (cont’d)

SME Co-Investment Fund III• Additional S$100 million for the SME Co-Investment Fund III• Support Singapore-based SMEs to scale up and internationalise

Enterprise Financing Scheme (“EFS”)• Streamlines eight existing SME financing schemes • Expected to be launched in October 2019• Meanwhile, SME Working Capital Loan extended for another two years till 31 March 2021

26/2/2019

Enablers for Firms to Scale Up, Innovate, Automate and Go Global (cont’d)

Expansion of the SMEs Go Digital Programme• Currently, there are Industry Digital Plans (“IDPs”) for seven sectors• Infocomm Media Development Authority will develop more IDPs, starting with the Accountancy, Sea

Transport and Construction sectors• Pre-approved digital solutions to include more advanced digital solutions• Funding support under the PSG

Digital Services Lab (“DSL”)• Three-year pilot to address challenges in digitalization in the Services sectors• Focus on projects with industry-wide impact• Funding support of up to 70% of qualifying costs