Budget 2019 - Overview of Tax Changes

The following tax changes were announced by the Minister for Finance, Mr. Heng Swee Keat, in his Budget Statement for the Financial Year 2019, which was delivered in Parliament on Monday, 18 Feb 2019.

For full details of the Budget Speech, please refer to the Singapore Budget website.

For Individuals

 Tax Change  Summary FAQ / Related Information
Personal Income Tax Rebate for resident individual taxpayers for Year of Assessment (“YA”) 2019 As part of the Bicentennial Bonus, a Personal Income Tax Rebate of 50% of tax payable will be granted to all tax resident individuals for YA 2019 (i.e. for income earned in 2018). The rebate will be capped at $200 per taxpayer.

Personal Tax Rebate (for YA 2019)   

Allow resident individual taxpayers to claim Grandparent Caregiver Relief in respect of a handicapped and unmarried dependent child, regardless of the child’s age To provide greater support and recognition to working mothers with handicapped and unmarried dependent children, taxpayers will be allowed to claim Grandparent Caregiver Relief in respect of a handicapped and unmarried dependent child, regardless of the child’s age, if they have met all other conditions. This will take effect from YA 2020 (i.e. for income earned in 2019). Grandparent Caregiver Relief
Lapse the Not Ordinarily Resident (“NOR”) scheme

Access to global talent to complement our local talent is key to maintaining Singapore’s competitiveness and driving our economic growth.

The NOR scheme was introduced in Budget 2002 with the objective of attracting talent with regional and global responsibilities to relocate to Singapore. MOF periodically reviews the relevance of our tax schemes.

The NOR scheme will lapse after YA 2020. The last such NOR status will be granted for YA 2020 and expire in YA 2024. Individuals who have been accorded the NOR status will continue to be granted NOR tax concessions until their NOR status expires, if they continue to meet the conditions of the concessions.

Singapore will continue to build a conducive environment to attract and retain highly-skilled individuals. This includes a competitive tax regime, stable political, economic and social environment, strong regional connectivity, and high standards of healthcare, housing and education.

Not Ordinarily Resident (NOR) Scheme


For All Businesses 


Tax Change    Summary FAQ / Related Information 
Extend the Writing Down Allowance (“WDA”) for acquisition of qualifying Intellectual Property Rights (“IPRs”) under section 19B of the Income Tax Act (“ITA”)
 In recognition that IPRs are important creators of value in a knowledge-based economy, the WDA under section 19B will be extended to cover capital expenditure incurred in respect of qualifying IPRs acquired on or before the last day of the basis period for YA 2025.

Writing-Down Allowance for Intellectual Property Rights (IPRs) 


Other Tax Changes for Businesses

Tax Changes  Summary  FAQ / Related Information

Extend the income tax concessions for Singapore-listed Real Estate Investment Trusts (“S-REITs”)

To continue to promote the listing of REITs in Singapore and to strengthen Singapore’s position as a REITs hub in Asia, the existing tax concessions for S-REITs will be extended till 31 December 2025.

The sunset clause for the tax exemption on S-REITs distributions received by individuals will be removed.

All other conditions for the income tax concessions remain the same. 

Withholding Tax Rates

MAS will provide further details by May 2019.

Extend the income tax concessions for Singapore-listed Real Estate Investment Trusts Exchange-Traded Funds (“REITs ETFs”)

The existing tax treatment accorded to REITs ETFs will be extended till 31 December 2025. The sunset clause will be removed for the tax exemption on REITs ETFs distributions received by individuals. All other conditions for the income tax concessions remain the same.


MAS will provide further details of the change by May 2019.
 

Lapse the Designated Unit Trust (“DUT”) scheme 

Tax incentive schemes are reviewed regularly to ensure relevance.

The DUT scheme will lapse after 31 March 2019. Funds in the form of unit trusts may apply for other tax incentives for funds.

Existing DUTs will continue to receive the tax deferral benefits under the DUT scheme, on and after 1 April 2019, if they continue to meet all the conditions. 

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Lapse the Approved Unit Trust (“AUT”) scheme 

Tax incentive schemes are reviewed regularly to ensure relevance.

The AUT scheme will lapse after 18 February 2019.

Existing AUTs will continue to receive the tax concession under the AUT scheme for a period of five years from YA 2020 to YA 2024.

This will allow existing AUTs sufficient time to transit to alternative tax incentive schemes, where relevant. 

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Goods and Services Tax


Tax Change Summary FAQ / Related Information 
Tighten the GST Import Relief for Travellers

To ensure that our tax system continues to remain resilient amidst rising international travel, we have revised the quantum of GST import relief for travellers. Travellers who spend less than 48 hours outside Singapore will get GST import relief for the first $100 (instead of $150 currently) of the value of goods bought overseas. Travellers who spend at least 48 hours outside Singapore will get GST import relief for the first $500 (instead of $600 currently) of the value of goods bought overseas.

GST 1 

This will take effect for travelers arriving in Singapore from 12.00am, 19 February 2019.

Travellers bringing goods into Singapore
Extend the GST remission for S-REITs and Singapore-listed Registered Business Trusts (“RBTs”) in the infrastructure business, ship leasing and aircraft leasing sectors To continue facilitating the listing of S-REITs and RBTs in the infrastructure business, ship leasing and aircraft leasing sectors, the existing GST remission will be extended till 31 December 2025. All conditions for the GST remission remain the same. MAS will provide further details of the change by May 2019.REITs and Registered Business Trusts

Property Tax

Tax Changes   Summary  FAQ / Related Information
Lapse the Property Tax (Tourist Projects) Order
Schemes are reviewed regularly to ensure relevance. The Property Tax (Tourist Projects) Order will lapse after 18 February 2019.
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For Financial Sector

 Tax Changes Summary FAQ / Related Information 
Extend and Refine Tax Incentive Schemes for Funds Managed by Singapore-based Fund Managers ("Qualifying Funds")

To continue to grow Singapore’s asset management industry, the tax concessions relating to Qualifying Funds will be extended till 31 December 2024.

The sections 13CA, 13R and 13X schemes will also be refined to keep the schemes relevant and to ease compliance burden. The key refinements are as follows:

a) The condition that a basic tier fund must not have 100% of the value of its issued securities beneficially owned, directly or indirectly, by Singapore persons will be removed;

b) The enhanced tier fund scheme will be enhanced to (i) include co-investments, non-company SPVs and more than two tiers of SPVs, (ii) allow debt and credit funds to access the “committed capital concession”, and (iii) include managed accounts6;

c) The list of DI will be expanded by removing the counter-party and currency restrictions, and including investments such as credit facilities and advances, and Islamic financial products that are commercial equivalents of DI. The condition for unit trusts to wholly invest in DI will be removed;

d) The list of SI will be enhanced to include income in the form of payments that fall within the ambit of section 12(6) of the ITA; and

e) Qualifying non-resident funds under sections 13CA and 13X will be able to avail themselves of the 10% concessionary tax rate applicable to qualifying non-resident non-individuals when investing in S-REITs and REITs ETFs. The removal of condition in (a) will be effective from YA 20207. The enhancements in (b) will apply on and after 19 February 2019. The enhancements in (c) and (d) will apply to income derived on and after 19 February 2019. 

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Recovery of GST for Qualifying Funds

To further grow Singapore as a centre for fund management and administration, the concession will be extended till 31 December 2024.

MAS will release further details of the change by May 2019.

Finance

7 Applicable from YA2020 instead of on and after 19 February 2019, to avoid subjecting existing funds to two different set of conditions in the same basis period.