To help companies cope with the rising costs of doing business, the Minister for Finance has announced in Budget 2011 that for Year of Assessment (YA) 2011, companies will receive:
1) A Corporate Income Tax (CIT) Rebate; or
2) A SME Cash Grant,
whichever is the higher amount.
Corporate Income Tax (CIT) Rebate
A 20% CIT rebate, subject to a cap of $10,000, will be allowed to each company for YA 2011. The rebate will be computed on the tax payable amount after deducting tax set-offs (e.g. double tax relief and unilateral tax credit).
One-Off SME Cash Grant
Recognising that many small companies are not taxable and would not be able to benefit from the CIT rebate, a one-off SME cash grant of 5% on total revenue for YA 2011*, subject to a cap of $5,000 will be separately given to them. Like the CIT rebate, this SME cash grant initiative is aim at providing one-off support for companies that face increased business costs.
* If the revenue as per your accounts is for a period that covers two YAs, one of which is YA 2011, please provide a breakdown of your revenue for the basis period relating to YA 2011 in your tax computation.
Company A was incorporated in Singapore on 15 Apr 2009 and commenced business on the same day. The financial year end of the company is 30 Jun. Company A’s first set of accounts is prepared for the period from 15 Apr 2009 to 30 Jun 2010.
As the first set of accounts covered a period of more than 12 months, there are two relevant YAs as follows:
|2010 (1st YA)
15 Apr 2009 - 30 Jun 2009
|2011 (2nd YA)
1 Jul 2009 - 30 Jun 2010
The company has to prepare tax computations for the two YAs for submission in 2011. It has to also provide a breakdown of its revenue for the basis period from 1 Jul 2009 to 30 Jun 2010 in the tax computation for YA 2011. Where the breakdown is not provided, IRAS may use the time apportionment basis to compute the applicable amount of revenue.
Scope & Conditions of CIT Rebate & SME Cash Grant
SME Cash Grant
- To be eligible for the SME cash grant, the company or registered business trusts must have made CPF contribution for at least one employee during the basis period of YA 2011. If no CPF contribution is made, the company or registered business trust will only be eligible for the CIT rebate;
- Companies and registered business trusts will receive automatically the higher of CIT rebate amount or the SME cash grant amount. CIT rebate will be given if both amounts are the same.
For more details, please refer to the Frequently Asked Questions on the CIT Rebate and the SME Cash Grant (88KB).
Calculator for CIT Rebate and SME Cash Grant
You may use this calculator (382KB) to estimate your YA 2011 CIT rebate or SME cash grant.
Payment of CIT Rebate and SME Cash Grant
Companies do not need to apply for the CIT rebate or SME cash grant. IRAS will compute the amount of the CIT rebate or the SME cash grant which a company will receive when companies file their YA 2011 income tax return (i.e. Form C) by the 30 Nov filing deadline.
IRAS has started disbursing the SME cash grant since Aug 2011. Companies can expect to receive the SME cash grant within six months from the submission of the Form C for YA 2011.