Singapore’s Deputy Prime Minister and Finance Minister Heng Swee Keat while delivering the country’s annual budget on 18 February 2020 indicated that last year the country’s economy grew by a modest 0.7%, which is its weakest growth since the 2008 financial crisis. As such the Ministry of Trade and Industry (MTI) has downgraded the GDP forecast from between 0.5% to 2.5% to between -0.5% and 1.5%, he said.
Tax changes in Singapore Budget 2020
3) Extension of interest-free instalment for CIT
Grant automatic extension of interest-free instalments of 2 months for payment of CIT on Estimated Chargeable Income (ECI) filed within three months from the companies’ financial year-end (FYE). This automatic extension of instalment plan by 2 more months will apply to:
- Companies that file their ECI from 19 February 2020 to 31 December 2020; and
- Companies that file their ECI before 19 February 2020, and have ongoing instalment payments to be made in March 2020.
4) Enhancement of carry-back relief scheme
The carry-back relief scheme will be enhanced for YA2020. Under the enhanced scheme, qualifying deductions for YA2020 may be carried back up to 3 immediate preceding YAs, capped at $100,000 of qualifying deductions and subject to conditions. Taxpayers may elect to carry back to the relevant preceding YAs an estimated amount of qualifying deductions available for YA2020, before the actual filing of their income tax returns for YA2020.
IRAS will provide the details of the change by end-March 2020.
5) Option to Accelerate Write-off of the Cost of Plant & Machinery (P&M) Acquisition
A taxpayer which incurs capital expenditure on the acquisition of P&M (plant and machinery) in the basis period for YA2021 (i.e. financial year (“FY”) 2020) will have an option to accelerate the write-off of the cost of acquiring such P&M over 2 years. This option, if exercised, is irrevocable.
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