On July 8, 2016 the Singaporean Ministry of Finance opened a consultation on the draft Income Tax (Amendment) (No. 3) Bill 2016 to invite interested parties to provide feedback on the Bill. The draft Income Tax (Amendment) (No. 3) Bill 2016 incorporates 49 proposed legislative amendments to the Income Tax Act. The consultation period runs from July 8, 2016 to July 29, 2016.
The draft Income Tax (Amendment) (No. 3) Bill 2016 incorporates 49 proposed legislative amendments to the Income Tax Act, including a.o.:
(a) Budget 2016 changes. These are the 18 tax changes announced by Minister for Finance, Mr Heng Swee Keat, in the 2016 Budget Statement;
(b) Amendment to implement Country-by-Country Reporting;
(c) Non-Budget 2016 changes.
Budget 2016 changes.
The key Budget tax changes include a.o.:
i) Enhance the Corporate Income Tax (“CIT”) rebate from 30% to 50% of corporate tax payable for Years of Assessment (“YAs”) 2016 and 2017, with a cap of $20,000 rebate per YA, to help SMEs especially.
ii) Enhance the Merger & Acquisition (“M&A”) scheme by granting the M&A allowance for the first $40 million (up from $20 million currently) of the consideration paid for qualifying M&As deals per YA till 31 March 2020. This is to support more M&As.
iii) Extend the Double Tax Deduction for Internationalisation scheme for four years till 31 March 2020 to support businesses in their internationalisation efforts.
iv) Extend the upfront certainty of non-taxation of companies’ gains from disposal of equity investments till 31 May 2022 to provide certainty to companies for their corporate restructuring.
v) Pilot the Business and Institute of a Public Character (“IPC”) Partnership Scheme (“BIPS”) from 1 July 2016 to 31 December 2018. Businesses that send their employees to volunteer and provide services to IPCs, including secondments, will receive a 250% tax deduction on associated cost incurred, subject to caps.
vi) Cap total personal income tax relief, at $80,000 per YA, with effect from YA 2018, to maintain a progressive personal income tax system.
Amendment to implement Country-by-Country Reporting
The Bill also includes an amendment to enable implementation of Country-by-Country Reporting (“CbCR”) with effect from enterprises’ financial years commencing on or after 1 January 2017. Singapore-headquartered multinational enterprises with global revenues exceeding S$1,125 million (equivalent to €750 million) will have to submit to IRAS an annual country-by-country (“CbC”) report containing the income, taxes paid, and other indicators of level of economic activities in every tax jurisdiction where they operate. This CbC report is to be submitted within 12 months from the last day of their financial year. IRAS will exchange the CbC reports with jurisdictions with which Singapore has entered into bilateral agreements for automatic exchange of CbC reports, having established that the jurisdictions meet the following conditions:
· First, these jurisdictions have a strong rule of law and can ensure the confidentiality of the information exchanged and prevent its unauthorised use.
· Second, there must be reciprocity in terms of the information exchanged.
Non-Budget 2016 changes
There are 30 other proposed changes to tax policies and administration which according to the Singaporean Ministry of Finance have been identified from periodic reviews of the income tax system.
The Singaporean Ministry of Finance has also issued a summary table which provides a brief description of the tax changes and explains the amendments to the Income Tax Act.
Click here to be forwarded to the summary table as provided by the Singaporean Government. (Downloadable file in Pdf format)
Further information on the consultation process can be found here.
Copyright – internationaltaxplaza.info
and
Stay informed: Subscribe to International Tax Plaza’s Newsletter! It’s completely FREE OF CHARGE!
