2021 Singapore Budget Highlights (Tax)

On 16 February 2021, the Budget Statement was delivered in Parliament.

A key focus of the Budget was the theme of Emerging Stronger, Together.

The goal is to build new capabilities in people and businesses in this next phase of transformation.

The below is a summary of tax considerations which may impact businesses in Singapore due to the Singapore Budget announced on 16 February 2021.

Extensions and Changes

• Carry-back relief scheme extended to YA2021.
• Extension of the option to accelerate the write-off of cost for acquiring plant and machinery.
• Extension of the option to accelerate the deduction of expenses incurred on renovation and refurbishment.
• Enhancement of the Double Tax Deduction for Internationalizations Scheme (DTDI).
• Business and IPC Partnership Scheme extended till December 2023.
• NPO tax incentive extended till 31 December 2027.
• Investment Allowance (Energy Efficiency) (“IA-EE”) scheme renamed as Investment Allowance for Emissions Reduction” scheme. Projects involving the reduction of greenhouse gas emissions will now qualify.
• Accelerated Depreciation Allowances for Highly Efficient Pollution Control Equipment (“ADA-PCE”) scheme withdrawn from 17 Feb 2021.
• Tote Board’s Enhanced Fund-Raising Programme will also be extended by one year. Charities can apply to receive dollar-for-dollar matching on eligible donations, which are raised from projects in FY2021, up to a cap of S$250,000 per applicant.
• ComChest’s SHARE as One scheme dollar-for-dollar matching extended to FY2023.
• 250% tax deduction for donations extended to 31 December 2023.

Goods and Services Tax (GST)

• GST will be imposed on low value goods imported via air or post.
• GST will also be applicable for imported non-digital services such as live interaction with overseas providers of education, fitness training, counselling, and telemedicine. Such services have been subject to GST since 2020 at the business-to-business level and will be subject to GST at the business-to-consumer (B2C) level from 2023.
• The changes will take effect from 1 January 2023 even though the plans were announced in Budget 2018.
• Changes made for determining whether zero-rating applies to a supply of media sales. This will be based on the place where the customer and direct beneficiary of the service belong. This change will take effect from 1 January 2022.
• • • Media sales will be zero-rated if the customer belongs outside of Singapore and the direct beneficiary belongs outside Singapore or is GST registered in Singapore.
    • Media sales will be standard-rated if the customer belongs in Singapore

 

View PDF here: 2021-Singapore-Budget-Highlights-Tax

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