SINGAPORE BUDGET 2019 - UHY Lee Seng Chan & Co
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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
2FOREWORD
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.
3BUSINESS 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.
4BUSINESS 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.
5PERSONAL 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.
6GOODS 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.
7PROPERTY 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.
8FOREIGN 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.
9OTHERS 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
10OTHERS 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
11OTHERS 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.
12OTHERS 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.
13OTHERS 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.
14OTHERS 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.
15GLOSSARY
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
16LTA 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
17CONTACTS
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.
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