The Deputy Prime Minister and Minister for Finance, Mr. Heng Swee Keat, announced the 2021 Budget in Parliament on 16 February 2021. Highlights of the tax and other changes are as follows:

1Individual Tax Changes

No changes were announced as regards individual income tax. 

2Corporate/Business Tax Changes

  • The enhanced Carry-back Relief Scheme allow taxpayers to carry back qualifying deductions to 3 immediate preceding YAs has been extended to YA 2021.
  • The Accelerated Write-off of the Cost of Acquiring Plant and Machinery will be extended to capital expenditure incurred on the acquisition of P&M in the basis period for YA 2022.
  • For qualifying Renovation and Refurbishment (“R&R”) expenditure incurred during the basis period for YA2022, the taxpayer will have the option to claim R&R deduction over 1 YA.
  • The Double Tax Deduction (“DTD”) for Qualifying Upfront Cost Attribution to Retail Bonds Issue will be extended till 31 December 2026.
  • The Withholding Tax (“WHT”) Exemption for the Financial Sector will be extended till 31 December 2026.
  • The WHT Exemption on Payments for Over-the-Counter (“OTC”) financial derivatives will be extended till 31 December 2026.
  • The Not-for-Profit Organisation (“NPO”) Tax incentive will be extended till 31 December 2027.
  • The Investment Allowance (“IA”) scheme will be retained till 31 March 2023.
  • The Investment Allowance (Energy Efficiency) (“IA-EE”) scheme will be applied to Economic Development Board approved projects from 1 April 2021 to 31 December 2026.
  • 250% tax deduction for qualifying Donations will be extended till 31 December 2023.
  • The Business and IPC Partnership (“BIPS”) scheme will be extended till 31 December 2023.

3Goods and Services Tax (“GST”) Changes

  • GST rate remains at 7% for 2021.
  • For Low-Value Imported Goods and Imported Non-Digital Services, GST will be charged for B2C via the Overseas Vendor Registration regime with effect from 1 January 2023.
  • The Zero-Rating of Supply of Media Sales conditions will be based on the place where the customer and direct beneficiary of the service belong with effect from 1 January 2022.

4Others Changes

  • The Jobs Support Scheme (“JSS”) will be extended for firms in Tier 1 and 2 sectors by up to six months (up to September 2021).
  • The SGUnited Jobs and Skills Package (“SGUJS”) will have an extension of 3 more packages namely the SGUnited Traineeships, SGUnited Mid Career Pathways Programme – Company Attachment / Company Training and the SGUnited Skills.
  • The Additional Registration Fee (“ARF”) floor for electric cars and taxis will reduced from S$5,000 to S$0 from January 2021 to December 2023.
  • With immediate effect, the petrol duty rates for Premium grade petrol (unleaded) and Intermediate grade petrol (unleaded) will be raised from S$0.64 to S$0.79 per litre and S$0.56 to S$0.66 per litre respectively.
  • Substantial road tax rebates will be provided for petrol and petrol-hybrid vehicles for 1 year with effect from 1 August 2021 to 31 July 2022.

The above summary was prepared for your quick reference and should you require more details on the above, please contact us.

16 February 2021

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