By The Ministry of Finance is now conducting a public consultation on the draft Income Tax (Amendment) Bill 2014 from 4 to 24 July 2014, and invites the Public to give feedback on the Bill.
The proposed amendments to the Income Tax Act (“ITA”) relate mainly to 14 changes announced in the 2014 Budget Statement. These include:
- Extension of the Productivity and Innovation Credit (“PIC”) scheme for three years till Year of Assessment (“YA”) 2018, and the introduction of the PIC+ Scheme. Under PIC+, qualifying SMEs can claim a 400% tax deduction for up to $600,000 of expenditure per qualifying activity per YA;
- Extension of the Research & Development (“R&D”) tax measures. The additional 50% tax deduction for R&D granted under section 14DA(1) of the ITA is extended for ten years till YA 2025. The further tax deduction for EDBapproved R&D projects, granted under section 14E, is extended till 31 March 2020;
- Extension of the Section 19B Writing Down Allowance (“WDA”) for acquisition of qualifying Intellectual Property Rights (“IPRs”) for five years till YA 2020, and clarifying the type of “information that has commercial value” that would be eligible for WDA1;
- Treatment of Additional Tier 1 instruments2 as debt for tax purpose in the basis period for YA 2015 and thereafter; and
- Enhancement of various dependant-related reliefs for individual taxpayers from YA 2015
The Income Tax (Amendment) Bill 2014 also provides for refinements to existing tax policies and tax administration arising from ongoing reviews of Singapore’s income tax system. These refinements include:
- Additional measures to curb PIC abuse.
- Allowing Supplementary Retirement Scheme (“SRS”) members to withdraw their SRS investments without liquidating the investments. This will reduce the transaction costs they incur for withdrawals. The SRS investments will be valued and taxed in the same manner as when the SRS investments are liquidated for cash withdrawal; and
- Amendments to enable Singapore to ratify the Convention on Mutual Administrative Assistance in Tax Matters
The public can access the detailed consultation documents for the draft Income Tax (Amendment) Bill 2014 on the Ministry of Finance’s website (www.mof.gov.sg) and the REACH consultation portal (www.reach.gov.sg). Respondents may send their comments to the Ministry of Finance directly via the website, email, fax or post.