Singapore: Tax measures in budget 2022

Singapore’s budget for 2022 includes proposed measures concerning taxation of income, consumption, and wealth

Tax measures in budget 2022

Singapore’s budget for 2022, presented 18 February 2022, includes the following proposed measures concerning the taxation of income, consumption, and wealth.

Minimum effective tax rate regime

  • Singapore is exploring a “top-up tax” called a minimum effective tax rate regime due to Pillar Two of BEPS 2.0.
  • The minimum effective tax rate regime would top up a multinational enterprise (MNE) group's effective tax rate in Singapore to 15%, and would apply to MNE groups in Singapore with annual revenues of at least €750 million in consolidated financial statements of the ultimate parent entity.

Disclosure of company-related information for official duties

  • When taxpayers provide consent, the Inland Revenue Authority of Singapore (IRAS) would be allowed to disclose such information to a public officer.
  • The IRAS would also be authorized to disclose a prescribed list of identifiable information on companies to public sector agencies for purposes of the performance of official duties but without the need for taxpayer consent. The measures would require amendments to the income tax and goods and services tax (GST) legislation.

Enhance tax incentive regime for qualifying funds

  • The conditions imposed on investments in precious metals under a designated investments list would be refined, beginning 19 February 2022:
    • Investments in physical investment precious metals would not need to be incidental to trading of derivative investment precious metals.
    • A cap would be revised to 5% of total investment portfolio for incentive awards under provisions of the income tax law.
  • The Monetary Authority of Singapore (MAS) is to provide further details by 31 May 2022.

Increase in carbon tax

The rate of the carbon tax would increase according to the following schedule:

  • From the present through 2023—the current tax of $5* per tonne would remain unchanged.
  • For 2024 and 2025—the tax would increase to $25 (from $5) per tonne.
  • For 2026 and 2027-the tax would increase to $45 (from $25) per tonne.
  • By 2030—the tax would increase to a range of $50 to $80 (from $45) per tonne.

*$=Singapore dollar

Insurers' basis of preparation of tax computation changed to align to MAS statutory returns

  • MAS statutory returns would be used instead of financial statements with adoption of Financial Reporting Standard 117, effective from the year of assessment (YA) 2024 (or YA 2025 for insurers whose financial year end is not 31 December).
  • The IRAS is to provide further details by 30 September 2022.

Increase in property tax rates for owner-occupied residential properties

The property tax rates for owner-occupied residential properties with annual value above $30,000 would increase according to the following schedule:

  • Beginning 1 January 2023—the top marginal rate would increase to 23% (16%).
  • Beginning 1 January 2024—the top marginal rate would increase to 32% (from 23%).

Increase in individual (personal) income tax rates from YA 2024

Tax residents - new chargeable income tiers and rates

  • $500,001 – $1,000,000—a tax rate of 23%
  • In excess of $1,000,000—a tax rate of 24%

Non-tax residents

  • Tax rate increased to 224% (from 22%) [other than employment income and certain income taxable at reduced withholding tax rate]

Additional registration fee increase

  • New additional registration fee tier of 220% would be introduced for portion of open market value above $80,000.

Increase in property tax rates for non-owner-occupied residential properties

The Increase would apply to all non-owner[1]occupied residential properties according to the following schedule:

  • Beginning 1 January 2023—the top marginal rate would increase to 27% (from 20%)
  • Beginning 1 January 2024—the top marginal rate would increase to 36% (from 27%)

GST rate increase

The GST rate would increase according to the following schedule:

  • Increase to 8%, effective 1 January 2023
  • Increase to 9%, effective 1 January 2024

Miscellaneous

There would be changes to the tax treatment of travel arranging services. Other tax measures in the budget 2022 concern:

  • Withholding tax exemption for financial sector
  • Tax incentives for project and infrastructure finance
  • Integrated investment allowance scheme

Read a February 2022 report [PDF 1.6 MB] prepared by the KPMG member firm in Singapore 

Read also a tax fact sheet summary [PDF 1.6 MB] of the tax changes in the 2022 budget as prepared by the KPMG member firm in Singapore

 

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