SINGAPORE BUDGET 2019 - UHY Lee Seng Chan & Co

Page created by Edwin Christensen
 
CONTINUE READING
SINGAPORE BUDGET 2019 - UHY Lee Seng Chan & Co
SINGAPORE BUDGET 2019

“Your Trusted Partner for Excellence”
CONTENTS
FOREWORD ............................................................................................................................................. 3
BUSINESS TAX....................................................................................................................................... 4-5
PERSONAL INCOME TAX .......................................................................................................................... 6
GOOD AND SERVICES TAX........................................................................................................................ 7
PROPERTY TAX ........................................................................................................................................ 8
FOREIGN WORKER LEVY .......................................................................................................................... 9
OTHERS ............................................................................................................................................ 10-15
GLOSSARY ........................................................................................................................................ 16-17
CONTACTS ........................................................................................................................................ 18-19

                                                                           2
FOREWORD
Finance Minister Heng Swee Keat delivered the Budget 2019 Statement in Parliament on
Monday, 18 Feb 2019, outlining a strategic plan to build a strong and united Singapore. Key
announcements include details of the Merdeka Generation Package and a bonus for
Singaporeans as the country marks its Bicentennial.

Close to 30 per cent of the Government’s total expenditure this year is being set aside to
support defence, security and diplomacy efforts, which is significant, but indispensable spending.
Meanwhile, the Government has included digital defence as the sixth pillar of Singapore’s Total
Defence framework. The other five pillars are military, civil, economic, social and psychological
defence.

Details of the much talked-about Merdeka Generation Package were announced during the
Budget speech. Mr Heng Swee Keat called it a “gesture of our nation’s gratitude” for those in
that generation. The bulk of the Merdeka Generation Package will go towards easing the burden
of healthcare costs for nearly 500,000 Singaporeans. It is part of a generous and forward-
looking Budget aimed at building a caring, inclusive, safe and prosperous society.

As part of Singapore’s commemoration of its Bicentennial year, the Minister also unveiled two
initiatives: a $200 million Bicentennial Community Fund to match charity donations and a $1.1
billion Bicentennial Bonus for Singaporean.

The Government will be investing in infrastructure in a big way and developing long-term plans
to protect the country against climate change.

Programmes supporting local enterprises at different stages of growth were also announced.
Meanwhile, the Government will further tighten the workforce quota for the services sector by
reducing the Dependency Ratio Ceiling in a stepped approach from 01January 2020.

To help start-ups venture into new markets, the Government will provide support in three areas:
providing customised assistance, better financing options, and supporting technology adoption.
Under these initiatives, Scale-up SG Programme, Innovation Agents Programme, SME Co-
Investment Fund III, Enterprise Financing Scheme and SME Working Capital Loan Scheme,
and Automation Support Package will be introduced, streamlined and extended.

We now summarize below an overview of the tax changes and some of the new initiatives
unveiled in the Budget Statement.

                                                3
BUSINESS TAX                                                    Effective

Corporate Income Tax (“CIT”) Rebate                              YA2019
                                                 The CIT rate remains at 17%.
                                                 The CIT rebate for YA2019 will be 20% of
                                                  tax payable, capped at $10,000.

Extend the Writing Down Allowance                       Extended from YA2020 to YA2025
(“WDA”) for acquisition of qualifying            The WDA under Section 19B will be
Intellectual Property Rights (“IPRs”)             extended to cover capital expenditure
                                                  incurred in respect of qualifying IPRs
                                                  acquired on or before the last day of the
                                                  basis period for YA2025.

Extend the 100% Investment Allowance                                Till 31.03.2021
(“IA”) under the Automation Support              The package will be extended by two
Package                                           years, for projects approved by Enterprise
                                                  Singapore from 01.04.2019 to 31.03.2021.
                                                 The approved capital expenditure will
                                                  remain capped at $10 million per project.

Extend the income tax concessions for                     Extended till 31.12.2025
Singapore-listed Real Estate Investment          The existing tax concessions for S-REITs
Trusts (“S-REITs”)                                will be extended till 31.12.2025.
                                                 The sunset clause for the tax exemption on
                                                  S-REITs distributions received by
                                                  individuals will be removed.
                                                 MAS will provide further details of the
                                                  change by May 2019.

                                          4
BUSINESS TAX                                                            Effective

Extend and Refine Tax Incentive Schemes                                Till 31.12.2024
for Funds Managed by Singapore-based                The existing tax concessions will be
Fund Managers (“Qualifying Funds’)                   extended till 31.12.2024.
                                                    The sections 13CA, 13R and 13X schemes
                                                     will also be refined to keep the schemes
                                                     relevant and to ease compliance burden.
                                                    MAS will provide further details of the
                                                     change by May 2019.

Lapse of the Designated Unit Trust (“DUT”)                           After 31.03.2019
scheme                                              The DUT scheme will lapse after
                                                     31.03.2019.
                                                    Existing DUTs will continue to receive the
                                                     tax deferral benefits under the DUT
                                                     scheme, on and after 01.04.2019.

Lapse of the Approved Unit Trust (“AUT”)                              After 18.02.2019
scheme                                              The AUT scheme will lapse after
                                                     18.02.2019.
                                                    Existing AUTs will continue to receive the
                                                     tax concession under the AUT scheme for
                                                     a period of five years from YA2020 to
                                                     YA2024.

                                             5
PERSONAL INCOME TAX                                                 Effective

Personal Income Tax                                                   YA2019
                                                    No change to the personal income tax
                                                     rates.
                                                    A tax rebate of 50% of tax payable will be
                                                     granted to all tax resident individuals for
                                                     YA2019.
                                                    The rebate will be capped at $200 per
                                                     taxpayer.

Grandparent Caregiver Relief in respect of                            YA2020
a handicapped and unmarried dependent               Resident individual taxpayers can claim
child, regardless of the child’s age                 Grandparent Caregiver Relief in respect of
                                                     a handicapped and unmarried child,
                                                     regardless of the child’s age.
                                                    This will take effect from YA2020.

Lapse of the Not Ordinarily Resident                             After YA2020
(“NOR”) scheme
                                                    The NOR scheme will lapse after YA2020.
                                                    The last such NOR status will be granted
                                                     for YA2020 and expire in YA2024.
                                                    Qualifying individuals who have been
                                                     accorded the NOR status will continue to
                                                     be granted NOR tax concessions until their
                                                     NOR status expires.

                                             6
GOODS AND SERVICES TAX                                                 Effective

Tighten GST Import Relief for Travellers                       wef 19.02.2019, 12.00am

                                                      Hours spent    Value of goods granted GST
                                                      outside                    relief
                                                      Singapore       Previously          Wef
                                                                                      19.02.2019,
                                                                                        12.00am
                                                   Less than 48          $150            $100
                                                   hours
                                                   At least 48           $600            $500
                                                   hours
                                                   This will take effect for travellers arriving in
                                                      Singapore from 12.00am, 19.02.2019.
                                                   The relief is applicable to Singapore
                                                      Citizens, Singapore Permanent Residents
                                                      and tourists but is not applicable for crew
                                                      members and holders of a work permit,
                                                      employment pass, student’s pass,
                                                      dependant’s pass, or long term pass
                                                      issued by the Singapore Government.
                                                   The relief does not apply to intoxicating
                                                      liquor and tobacco, as well as goods
                                                      imported for commercial purposes.

Extend the GST remission for S-REITs and                             Till 31.12.2025
Singapore-listed Registered Business                   The existing GST remission will be
Trusts (“RBTs”) in the infrastructure                   extended till 31.12.2025.
business, ship leasing and aircraft leasing            All other conditions remain the same.
sectors                                                MAS will provide further details of the
                                                        change by May 2019.

Recovery of GST for Qualifying Funds                                 Till 31.12.2024
                                                       The following concession will be extended
                                                        till 31.12.2024.

                                                        Qualifying Funds that are managed by
                                                        prescribed fund manager in Singapore are
                                                        allowed, by way of concession, to claim
                                                        GST incurred on expenses at a fixed
                                                        recovery rate.

                                                       MAS will release further details by May
                                                        2019.

                                              7
PROPERTY TAX                                                Effective

Lapse of the Property Tax (Tourist                         After 18.02.2019
Projects) Order                             Under the Order, the Minister may grant
                                             approval for new tourist projects to have
                                             their annual value computed based on 6%
                                             of the preceding year’s gross receipts, for
                                             the first five years from the completion of
                                             the buildings.
                                            The Order will lapse after 18.02.2019.

                                     8
FOREIGN WORKER LEVY                                            Effective

Deferring foreign worker levy (“FWL”)                     Deferred till 30.06.2020
changes
                                             The planned increase in foreign worker levy
                                              for the Marine Shipyard and Process
                                              sectors was deferred from 01.07.2018 to
                                              01.07.2019 as announced in Budget 2018.
                                             The increase is now further deferred for one
                                              more year.

Reduction in Dependency Ratio Ceiling        DRC for the services sector is reduced as
(DRC)                                         follows:

                                                             Current        Changes
                                            DRC              40%       Reduce to 38% on
                                                                       01.01.2020.
                                            Services
                                                                       Reduce to 35% on
                                                                       01.01.2021.

                                            S Pass sub-      15%       Reduce to 13% on
                                            DRC                        01.01.2020.

                                            Services                   Reduce to 10% on
                                                                       01.01.2021.

                                             DRC for other sectors will remain
                                              unchanged.

                                        9
OTHERS                                                            Effective

Tighten the Duty-Free Allowance for Liquor                       01.04.2019
Products                                         The total duty-free allowance will be two
                                                  litres.
                                                 Maximum duty-free allowance for spirite
                                                  remains at one litre.
                                                 This will take effect on and after
                                                  01.04.2019.
                                                 All conditions for the provision of duty-free
                                                  allowance remain unchanged.

Restructure Diesel Taxes                                          18.02.2019
                                                 With effect from 18.02.2019, the excise
                                                  duty on diesel fuel will be increased to
                                                  $0.20 per litre.
                                                 The annual special tax will be permanently
                                                  reduced for diesel cars and taxis by $100
                                                  and $850 respectively.

Offset measures for commercial diesel
vehicles                                         Three years of road tax rebate will be
                                                  provided for commercial diesel vehicles.

                                                                           Road tax
                                                                           rebate
                                                   01.08.2019-               100%
                                                   31.07.2020
                                                   01.08.2020-                75%
                                                   31.07.2021
                                                   01.08.2021-                50%
                                                   31.07.2022

                                                 In addition, diesel school buses will be
                                                  given yearly cash grants as follows:

                                                                           Cash
                                                                           grants
                                                   01.08.2019-               $1,600
                                                   31.07.2020
                                                   01.08.2020-                $800
                                                   31.07.2021
                                                   01.08.2021-                $400
                                                   31.07.2022

                                             10
OTHERS                       Effective

             In addition to the three-year road tax
              rebate, eligible diesel private hire and
              excursion buses that ferry students will
              also be given cash grants as follows:
                                      Cash grants
               01.08.2019-            Up to $1,800
               31.07.2020
               01.08.2020-               Up to $900
               31.07.2021
               01.08.2021-               Up to $500
               31.07.2022

         11
OTHERS                                                 Effective

Merdeka Generation Package (MGP)       Nearly 500,000 Singaporeans born
                                        between 1950 and 1959 belong to the
                                        Merdeka Generation.

                                       Merdeka Generation seniors will receive
                                        five benefits:
                                        1. Annual medisave top-ups of $200 per
                                            year from 2019 to 2023.

                                        2. One time top-up of $100 to their
                                           Passion Silver Card which can be used
                                           to pay for public transport, entry to
                                           swimming pools and activities at
                                           community clubs.

                                        3. Additional subsidies for outpatient care:
                                           a. Will receive special CHAS subsidies
                                              regardless of income. Those who do
                                              not have a CHAS card now will also
                                              qualify.
                                           b. At Policlinics and public Specialist
                                              Outpatient Clinics, they will receive
                                              25% off their subsidised bills. This is
                                              on top of the prevailing subsidies
                                              available.

                                        4. Extra 5% to 10% subsidies on
                                           Medishield Life premium.

                                        5. Additional $1,500 participation
                                           incentive, in addition to the $2,500
                                           announced previously, if they join
                                           CareShield Life insurance scheme.

                                       Those aged 50 and above in 2019 and do
                                        not receive the Merdeka or Pioneer
                                        Generation packages will get a five-year
                                        Medisave top-up of $100 a year , from
                                        2019 to 2023.

                                   12
OTHERS                                                           Effective

Extension of Services and Conservancy                   Financial Year 2019
charges rebate                              The rebate will be extended for another
                                             year.
                                            Eligible Singaporean households living in
                                             HDB flats will receive rebates of between
                                             1.5 to 3.5 months.
                                            Households with a member owning or
                                             having any interest in a private property, or
                                             have rented out the whole flat, are not
                                             eligible for the rebates.

Bicentennial Bonus                       Include the following components:
                                          GST Voucher
                                             Cash (Bicentennial Payment)
                                             Up to $300 in cash

                                                  Assessable       Annual Value of home as at
                                                  Income for                31.12.2018
                                                 YA2018 up to     Up to $13,000 More         than
                                                   $28,000                         $13,000 and
                                                                                   up to $21,000
                                                  Aged 21 and         $300              $150
                                                 above in 2019

                                             Workfare Bicentennial Bonus
                                             Low-income workers who received the
                                             Workfare Income Supplement (WIS)
                                             payments will receive an additional 10% of
                                             their WIS payment for work done in 2018,
                                             with a minimum payment of $100, in cash.

                                            Personal income tax rebate of 50% of tax
                                             payable, capped at $200 for YA2019.

                                            Top-up to Edusave Account and Post-
                                             Secondary Education Accounts.

                                            CPF Top-Up of up to $1,000 for eligible
                                             Singaporean aged 50 to 64 years old in
                                             2019, who have less than $60,000 of
                                             retirement savings in their CPF account.
                                                  For those aged 50 to 55 - base on their
                                                   combined Ordinary and Special Account
                                                   balance.
                                                  For those aged 56 to 64 - base on their
                                                   Retirement Account balance.

                                        13
OTHERS                                                       Effective

Bicentennial Community Fund                    The Government will provide dollar-for-
                                                dollar matching for donations made to
                                                IPCs in FY2019.
Edusave account                             Additional $150 top-up to Edusave account
                                             of students at primary and secondary
                                             levels.
                                            Up to $500 top-up for Singaporeans aged
                                             17 to 20 in their Post-Secondary Education
                                             Account.
                                            For students in institutes of higher learning,
                                             current local and overseas internship
                                             programmes will be combined under the
                                             Global Ready Talent Programme.
                                            Enhanced funding support for students
                                             interning overseas with Singapore firms.

Lower Income Families and Individuals       Enhanced Workfare Income Supplement
                                             (WIS) from Jan 2020. The qualifying
                                             income gap to be raised from $2,000 to
                                             $2,300 a month.
                                            For those aged 35 and older, there will be
                                             an additional 10% WIS payment for work
                                             done in 2018. Each person will get
                                             between $100 and $360.

Enterprise Development Grant                Its enhanced supporting level of up to 70%
                                             is due to lapse after 31.03.2020.
                                            It will now be extended to 31.03.2023.

Productivity Solutions Grant                Its scope is expanded to support up to
                                             70% of the out-of-pocket cost for training.
                                            The support level of up to 70% will be
                                             extended to 31.03.2023.

                                        14
OTHERS                                                      Effective

Measures to help companies transform       Established the SMECo-Investment Fund
                                            III.
                                           Streamline the existing schemes offered by
                                            Enterprise Singapore into a single
                                            Enterprise Financing scheme to be
                                            launched in October.
                                           Take on up to 70% of risk bank loans to
                                            companies incorporated for less than five
                                            years, compared to the current 50%.
                                           To extend the SME Working Capital Loan
                                            scheme for two more years till March
                                            2021. It will be folded into the Enterprise
                                            Financing scheme.
                                           To expand the SMEs-Go Digital
                                            programme to support more sectors, such
                                            as accountancy etc.
                                           Extend the digital solutions that SMEs can
                                            adopt.
                                           Extend the Automation Support Package
                                            by two years till 31.03.2021.
                                           To launch a pilot Innovation Agents
                                            programme for firms to tap on a pool of
                                            experts to advise them on opportunities to
                                            innovate and commercialise technology.

                                       15
GLOSSARY

 ABP            Approved Building Project
 ADA-EEET       Accelerated Depreciation Allowance for Energy Efficient Equipment and Technology
 ACRA           Accounting and Corporate Regulatory Authority
 AFL            Approved Foreign Loan
 AITD           Angel Investor Tax Deduction Scheme
 ALS            Aircraft Leasing Scheme
 ARI            Approved Royalties Incentive
 ASEC           Additional Special Employment Credit
 BEPS           Base Erosion and Profit Shifting
 BIPS           Business and IPC Partnership Scheme
 CAS            Cost Sharing Agreement
 CEVS           Carbon Emission-Based Vehicles Scheme
 CHAS           Community Health Assist Scheme
 CPF            Central Provident Fund
 DTD            Double Tax Deduction
 DUT            Designated Unit Trust Scheme
 EDB            Economic Development Board
 EIPIC          Early Intervention Programme for Infants and Children
 FIs            Financial Institutions
 FTC            Finance and Treasury Centre
 FY             Financial Year
 GLS            Government Land Sales
 GST            Goods and Services Tax
 GSTV           GST Voucher
 GTP            Global Trader Programme
 GVR            Green Vehicle Rebate
 HDB            Housing and Development Board
 HQ             Head Quarters
 IArb           International Arbitration
 ICT            Information and Communications Technology
 IEFS           Industrial Exemption Factory Scheme
 IE Singapore   International Enterprise Singapore
 IGS            International Growth Scheme
 IIA            Integrated Investment Allowance
 ITA            Income Tax Act
 IRU            Indefeasible Right to use
 LIA            Land Intensification Allowance

                                                       16
LTA      Land Transport Authority
M&A      Mergers & Acquisitions Scheme
MAS      Monetary Authority of Singapore
MDE      Media and Digital Entertainment
MOF      Ministry of Finance
MOM      Ministry of Manpower
MSI      Maritime Sector Incentive
MYE      Man-Year-Entitlement
PE       Permanent Establishment
PIC      Productivity and Innovation Credit
PTE      Partial Exemption Scheme
R&D      Research and Development
R&R      Renovation and Refurbishment
RBTs     Registered Business Trusts
REITs    Real Estate Investment Trusts
S&CC     Service and Conservancy Charges
SEC      Special Employment Credit
SME      Small and Medium Enterprise
SPRING   SPRING Singapore
SUTE     Start-up Tax Exemption Scheme
TEC      Temporary Employment Credit
TRS      Tourist Refund Scheme
WCS      Wage Credit Scheme
WDA      Writing Down Allowance
WHT      Withholding Tax
WIS      Workfare Income Supplement
WPHs     Work Permit Holders
YA       Year of Assessment

                                              17
CONTACTS

Tax Services

Lee Seng Suan
lss@uhylsc.com.sg
+65 6395 5142

Gan Hoe Kwang
hoekwang.gan@uhylsc.com.sg
+65 6395 5108

Ho Hai Cheong
haicheong.ho@uhylsc.com.sg
+ 65 6395 5140

Luo Jun
jun.luo@uhylsc.com.sg
+ 65 6395 5145

This Budget Summary is prepared for the information of clients and is intended for general reference only. No
liability can be accepted for any actions taken or for any loss caused by reliance on it without prior consultation
with an appropriate professional.

                                                         18
6001 Beach Road #14-01 Golden Mile Tower, Singapore 199589
Tel +65 6395 5100 | Fax +65 6298 6263 | www.uhylsc.com.sg

UHY Lee Tax Services Pte Ltd (the “Firm”) is a member of Urbach Hacker Young International Limited, a UK company, and forms part of the
international UHY network of legally independent accounting and consulting firms. UHY is the brand name for the UHY International
network. The services described herein are provided by the Firm and not by UHY or any other member firm of UHY. Neither UHY nor any
member of UHY has any liability for services provided by other members.

©2019 UHY Lee Tax Services Pte Ltd

An independent member of UHY International

“Your Trusted Partner for Excellence”

                                                                 19
You can also read