Singapore Gazettes’ Laws for Price range Change 2021
by Mary Swire, Tax-Information.com, Hong Kong
November 23, 2021
The Revenue Tax Invoice (Modification) 2021 was printed within the Singapore Official Journal on November 16, 2021, having beforehand been authorized by the President of Singapore.
The invoice consists of tax measures that had been introduced within the 2021 finances; business-wide and sector-specific measures introduced by the federal government in Might 2021 and July 2021 in response to the COVID-19 pandemic; Tax modifications because of the periodic evaluate of Singapore’s revenue tax system; and technical modifications.
For instance, the draft regulation supplies for the next measures introduced within the finances:
The extension of the loss carry-back reduction system to allow the return of certified deductions for as much as three years (as an alternative of 1) will likely be prolonged for the tax yr 2021;
The choice of early depreciation of the acquisition prices for machines and programs over two (as an alternative of three) years will likely be prolonged to investments within the acquisition of machines and programs within the base interval for the yr 2022;
The opportunity of claiming renovation and renovation deductions in a single yr (as an alternative of three) will likely be prolonged to qualifying bills for renovation and renovation within the base interval for the yr 2022;
The double tax deduction for internationalization is expanded to cowl extra qualifying bills (e.g. particular bills incurred in attending authorized digital commerce reveals); and
The 250 p.c tax deduction for qualifying donations to public establishments (IPCs) and different qualifying recipients will likely be prolonged for a further two years (i.e. for donations made between January 1, 2022 and December 31, 2023 inclusive). ).
The invoice additionally supplies for refinements and proposed modifications to current tax coverage and tax administration ensuing from the common evaluate of Singapore’s revenue tax system.
Notable modifications embody the introduction of an obligation for taxpayers to inform the comptroller in writing when a international tax authority downgrades international taxes that causes the international tax credit score beforehand granted in Singapore to be inflated on international revenue.
The Singapore company tax system tax foreign-source revenue on remittance and supplies a tax credit score for international tax paid on the identical revenue. If the abroad tax paid exceeds the Singapore tax payable on the abroad supply revenue, no additional Singapore revenue tax is payable. The change stipulates that taxpayers will notify the comptroller inside one yr if a international tax authority revises the international tax downwards, which ends up in the international tax credit score beforehand permitted in Singapore being inflated as IRAS must situation extra tax assessments.
The deadline for the gathering of extra tax assessments by IRAS in reference to the downward adjustment of international taxes can also be prolonged from two years to a few years.
Accordingly, within the occasion of a international tax enhance, taxpayers can declare extra international tax credit inside three years from the date of the adjustment.
Modifications are additionally included to align the utmost penalties for failure to register and different associated offenses underneath the Revenue Tax Act with these for related offenses underneath the Items and Companies Tax Act and the Property Tax Act.