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Corporate Tax
| Deduction for shares transferred by special purpose vehicle (SPV) under employee equity-based remuneration (EEBR) scheme |
The scope of tax deduction for shares transferred under an EEBR scheme is expanded to include a scheme that is administered by a special purpose vehicle (SPV) which acquires the company's or its holding company's shares and transfers them to the company's employees. The amount of tax deduction that can be claimed by the company is based on the lower of the amount paid by the company for the shares transferred to its employees or the cost to the SPV in acquiring those shares from the open market. This new income tax deduction is legislated under section 14PA of the ITA and takes effect from YA 2012. |
| Production and Innovation Credit |
The PIC scheme was further enhanced for YA 2011 to YA 2015 where a total of 400% (100% of base expenditure plus additional 300%) of tax deductions/allowances, capped at $400,000, can be claimed on qualifying expenditures incurred on each of the following activities:
a. acquisition or leasing of prescribed automation equipment,
b. training of employees,
c. acquisition of Intellectual Property Rights (IPR),
d. registration of certain IPRs, e. research and developments, and f. approved design projects.
The combined expenditure cap for each activity was also enhanced as follows:
- $800,000 for YA 2011 and YA 2012; and
- $1,200,000 for YA 2013, YA 2014 and YA 2015.
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| Deduction for pre-commencement expenses |
New businesses are allowed to claim pre-commencement expenses (of a revenue nature) incurred in the year when the first dollar of income is derived from a trade, business, profession or vocation. The business is deemed to have commenced business on the first day of the accounting year in which the first dollar of income is derived. This tax treatment is not applicable to a company assessed under section 10E of the ITA.
From the YA 2012, this tax treatment is enhanced. Revenue expenses incurred in the accounting year immediately preceding the deemed commencement date is treated as incurred on that date. The enhancement is given legal effect and is legislated under section 14U of the ITA. |
| Pooling of foreign tax credits (FTC) |
With effect from the YA 2012, businesses can elect to pool foreign taxes paid on any foreign-sourced income. The amount of FTC that can be claimed on the pooled basis is computed on the lower of:
- the total Singapore tax payable on the pooled foreign income; and
- the pooled foreign taxes paid on those income.
The foreign-sourced income must meet certain conditions to qualify for FTC pooling.
The FTC pooling system is enacted as section 50C of the ITA. | Goods and Services Tax
| Introduction of Approved Marine Customer Scheme (AMCS) |
The AMCS took effect from 1 October 2011. Under the AMCS, the Approved Marine Customer (AMC) can buy or rent goods for use or installation on a commercial ship that is wholly for international travel without having to pay GST. Furthermore, the AMC also enjoys zero-rating on procurement of repair or maintenance services of ship parts or components without having to prove that the parts or components are reinstalled or returned onto the ship as spares. |
| Changes to the Biomedical Industry |
The following changes to the Biomedical Industry were introduced with effect from 1 October 2011:
- GST relief granted upfront on importation of clinical trial materials (CTM) into Singapore;
- Extending the Approved Contract Manufacturer and Trader (ACMT) Scheme to qualifying biomedical contract manufacturers, which includes the following benefits:
- Disregard supply of value-added services performed relating to the treatment or processing of goods, and services rendered on failed or excess production (i.e. not subject to GST);
- Suspension of GST on importation of overseas goods belonging to overseas customer and consigned to the biomedical contract manufacturer for the purpose of performing value added services;
- Recover GST incurred by overseas clients on their local purchase of goods for use in contract manufacturing process.
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| Zero-rating of specialized storage and other services |
With effect from 1 October 2011, the supply of prescribed services (including storage, valuation, conservation and restoration services) would qualify for zero-rating, if the services are supplied to overseas persons and are supplied directly in connection with prescribed goods (e.g. art and antique), which are:
- stored in an approved specialised warehouse; or
- temporarily removed from an approved specialised warehouse for auction/exhibition and returned to the warehouse.
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| Importation of goods on behalf of overseas principal |
With effect from 1 Jan 2012, a local GST-registered business is allowed to act as a Section 33(2) agent to import and supply goods on behalf of an overseas principal, even where there is a change in the nature and form of the goods. However, the GST-registered business must be able to track the goods and ensure that all goods imported are supplied and GST is accounted for accordingly. | Stamp Duty
| Stamp Duty Relief for company converting to Limited Liability Partnership (LLP) |
With effect from 19 February 2011, stamp duty relief is extended to the transfer of assets upon conversion of a company to an LLP provided the following conditions are satisfied: -
- the shareholders of the original company remain as partners of the new LLP at the date of conversion;
- at the date of conversion, the percentage of partnership interest in the new LLP remain the same of the shareholding percentages in the original company;
- The assets of the new LLP are those of the original company at the date of conversion;
- At least 75% of the composition of the partnership interest in the LLP continues to be held by the original partners for 2 years after the date of conversion.
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| Additional Buyers Stamp Duty (ABSD) on Purchase of Residential Property by Certain Persons |
From 8 December 2011, the following rate of ABSD will be computed on the higher of purchase price or market value: -
- Foreigners and non-individuals buying any residential property – 10%
- Permanent residents buying the second and subsequent residential property – 3%
- Singapore citizens buying the third and subsequent residential property – 3%
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