Singapore: Tax measures in budget 2021

Singapore: Tax measures in budget 2021

Singapore’s budget for 2021 extends certain temporary tax measures introduced in the 2020 budget for another year in an effort to support businesses dealing with short-term challenges arising from the coronavirus (COVID-19) pandemic.

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Extended tax measures include an enhanced carry-back relief scheme (capped at $100,000*), an option to accelerate capital allowances claims, and an option to accelerate renovation and refurbishment (R&R) deductions.

*$=Singapore dollar

Other tax measures in the budget 2021 concern:

  • 100% investment allowance on approved automation projects until 31 March 2021
  • Investment allowance (energy efficiency) scheme (extended through 31 December 2026)
  • Double tax deduction for internationalization scheme
  • Tax deduction for costs attributable to retail bonds (extended through 31 December 2026)
  • Withholding tax exemptions for the financial sector
  • Withholding tax exemption on payments made for structured products (extended for five years)
  • Withholding tax exemption on payments for over-the-counter financial derivatives (extended for five years, through 31 December 2026)
  • Incentives under the insurance business development umbrella scheme for insurers and reinsurers engaged in “specialised insurance”
  • Repeal of the accelerated depreciation allowances for highly efficient pollution control equipment scheme
  • Collection of goods and services tax (GST) on imported “low-value goods” and non-digital services (effective 1 January 2023)
  • Change in basis of zero-rating GST on media sales (from 1 January 2022)

Read a February 2021 report [PDF 1 MB] prepared by the KPMG member firm in Singapore 

Read also a summary of the tax changes in the 2021 budget (prepared by the KPMG member firm in Singapore)

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