| One-off Corporate Income Tax (CIT) Rebate or SME Cash Grant |
Companies will receive a CIT Rebate or SME Cash Grant for Year of Assessment (YA) 2011.
Companies will automatically receive the higher of the tax rebate or the grant when IRAS assesses their YA 2011 corporate income tax returns.
CIT Rebate is 20% of YA 2011 corporate income tax payable, capped at $10,000.
SME Cash Grant will be based on 5% of the company’s revenue for YA 2011, subject to a cap of $5,000. To enjoy the SME Cash Grant, companies must have made CPF contributions in YA 2011.
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| Enhancement of the Productivity and Innovation Credit (PIC) Scheme |
To further encourage pervasive innovation and raise productivity efforts, the PIC scheme is simplified and enhanced in 4 main areas:
a) The quantum of tax deduction or allowance is increased to 400% of expenditure, for the first $400,000 spent on each qualifying activity;
b) PIC benefits will be made available to R&D done abroad;
c) Businesses will be allowed to combine the $400,000 expenditure cap per year for YA 2013 to YA 2015 into a new ceiling of $1,200,000 over the three years;
d) A simpler and enhanced cash conversion option where taxpayers can opt to receive, in lieu of tax deduction benefits, a cash payout of 30% of the first $100,000 of qualifying expenditure, up to $30,000.
All other existing conditions of the current concession apply.
IRAS will release further details by end June 2011.
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More information on Productivity and Innovation Credit (PIC) |
| Foreign Tax Credit (FTC) Pooling system |
FTC pooling is introduced to give businesses greater flexibility in their claim of FTCs, reduce their Singapore taxes payable on remitted foreign income (“FI”), as well as to simplify tax compliance.
Under the FTC pooling system, FTC is computed on a pooled basis, rather than on a source-by-source and country-by-country basis for each particular stream of income. The amount of FTC to be granted will be based on the lower of the pooled foreign taxes paid on the FI and the pooled Singapore tax payable on such FI.
This will take effect from YA 2012.
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More information on Foreign Tax Credit Pooling System |
| Streamlining of the section 14B and section 14K Tax Deduction Schemes |
The sections 14B and 14K tax deduction schemes will be merged into a single scheme given their common objective of assisting businesses to internationalise and expand overseas. The merged scheme will also be simplified to allow more businesses to benefit from the scheme. For instance, businesses can now submit their applications up to the day of their overseas marketing trip, instead of seven days before the trip.
A sunset clause will be introduced for this scheme – 31 Mar 2016.
These changes will apply to applications submitted and approved on or after 1 April 2011.
IE Singapore will release further details by end Mar 2011.
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Excerpts from Budget 2011 Annex 2 |
| Enhancement of the concession for enterprise development - enhancing the claim of pre-commencement expenses |
To facilitate the starting up of businesses, business will be allowed to claim pre-commencement revenue expenses incurred in the accounting year immediately preceding the accounting year in which they earn the first dollar of trade receipts.
The change is effective from YA 2012. Businesses can claim pre-commencement revenue expenses incurred from accounting year 2010 (YA 2011) if the first dollar of trade receipts is earned in or after accounting year 2011 (YA 2012).
All other existing conditions of the current concession apply.
IRAS will release further details by end Jun 2011.
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More information on concession for enterprise development - enhancing the claim of pre-commencement expenses |
| Facilitate Employee Equity-Based Remuneration (EEBR) schemes by extending tax deduction to cover cost of parent company’s shares acquired through a Special Purpose Vehicle (SPV) set up to administer EEBR scheme |
In recognition that a company may set up SPVs to act as trustees to acquire its parent company’s shares for its EEBR scheme, company will be allowed tax deduction for the cost incurred to acquire its parent company’s shares through a SPV for the fulfillment of its EEBR obligations.
This will take effect from the YA 2012.
IRAS will release further details by end Jun 2011.
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More information on Employee Equity-Based Remuneration (EEBR) Scheme |
| Renewal of Tax Exemption Scheme for Income Derived from Structured Products |
The existing tax exemption scheme for income derived from structured products will be extended to 31 Mar 2017.
All other existing conditions of the current scheme will apply.
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Excerpts from Budget 2011 Annex 2 |
| Tax Benefits for Voluntary CPF Medisave Contributions by Eligible Companies to Self-employed Persons (SEPs) |
Eligible companies that make voluntary contributions to SEPs’ CPF Medisave Accounts from 1 Jan 2011 will be given tax deduction.
Such contributions will be tax-exempt in the hands of SEPs.
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More information on Voluntary Cash Contribuions to Medisave Account
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| Enhancement to deductions on donations |
The tax deduction of 250% will be extended for another five years for donations made during 1 Jan 2011 to 31 Dec 2015.
All existing criteria to qualify for tax deduction remain unchanged.
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More information on Donations |