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This section covers other general tax recommendations to enhance Singapore’s tax regime and improve business relevance.

Tax Issue 1: Group relief scheme

The Situation :

To qualify for the group relief scheme, two Singapore companies are required to be members of a group (i.e. at least 75% of ordinary share capital in one company is beneficially held by the other; or at least 75% of ordinary share capital in each of the two Singapore companies is beneficially held directly or indirectly by a third Singapore-incorporated company).

Our Recommendation :

Consider enhancing the scheme such that group relief is available to Singapore companies held by a non-Singapore incorporated company
(subject to satisfying all other conditions).

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Tax Issue 2: Brought forward loss items

The Situation:

Currently, brought forward loss items (e.g. unabsorbed capital allowances and unabsorbed tax losses) can only be used by the company that incurred the loss and not by other companies within the same group.

Our Recommendation :

Consider allowing group relief for brought forward losses (i.e. allow companies to use the brought forward losses against profits of other companies within a group).

*We understand this is the case in New Zealand and the UK from 1 April 2017, subject to conditions.

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Tax Issue 3: Investment allowance

The Situation:

Under the current rules, investment allowance is only available for companies.

Our Recommendation :

With the introduction of limited liability partnerships in Singapore, the tax legislation should be updated to extend investment allowances to limited liability partnerships.

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Tax Issue 4: Tax relief for premiums paid on medical-related or health insurance policies

The Situation:

Currently, there is no standalone tax relief available to individuals for premiums paid on medical-related or health insurance policies.

Our Recommendation:

Enabling a tax relief for health insurance premiums will not only encourage more taxpayers to take up health insurance policies for themselves and their families, but also offer them greater access to healthcare. The tax relief could be subject to a cap (e.g. $5,000) which could be scaled according to age.

A tax relief for medical costs incurred by those over 50 years old for health screenings every other year should be considered, to encourage preventive healthcare. A cap of $500 per year could be set.

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Tax Issue 5: Double tax treaties (DTA)

The Situation:

Singapore does not have DTAs with a number of countries that Singapore companies have trade relations with.

DTAs are important for promoting international trade and investment by providing certainty of tax treatment of cross-border transactions to eliminate double taxation, thereby reducing business costs.

Our Recommendation:

Consider entering into DTAs with the following countries: Algeria, Angola, Chile, Jordan, Mozambique, Peru, Tanzania, Timor Leste and the US.

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