SUMMARY TABLE ON CHANGES AS ANNOUNCED AT BUDGET 2012 STATEMENT

basicgratisMechanics

Nov 5, 2013 (4 years and 4 days ago)

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1




SUMMARY TABLE ON CHANGES AS ANNOUNCED AT

BUDGET 201
2

STATEMENT


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


1


Provision of one
-
off SME cash
grant

A one
-
off SME cash grant
will be
given

to
help companies offset the high
costs which
may persist with the business slowdown. The
non
-
taxable cash grant
will be

given

for
the
year of assessment (“YA”)

㈰ㄲⰠ扡獥搠潮o㔥
of the company’s revenue
晲潭o 楴猠灲楮p楰慬i
ac瑩癩v楥猠
景f 奁 ㈰ㄲ2 獵扪ec琠瑯t a ca瀠潦
␵ⰰ〰



呯q扥 e汩g楢ie 景f 瑨e cas栠gra湴n

瑨攠c潭oany
浵獴 桡癥
浡摥 Cmc co湴物扵n楯湳i景f a琠汥l獴
潮o e浰moyee E
睨w

浵獴 湯琠扥 a 獨s牥桯汤敲
潦⁴桥⁣潭灡oy⤠楮⁴桥 牥汥癡湴⁰敲楯搮

pec瑩o
渠㤲n

xC污畳l‴㝝

2


Enhancement to
the Productivity
and Innovation
Credit (“PIC”)
pc桥浥

f渠 牥獰潮獥 瑯t 楮摵i瑲t fee摢ac欬k a湤n 瑯
灲潶楤p 浯牥 獵灰潲琠景f 扵獩湥獳敳s瑯t 楮癥獴
楮i 楮湯癡瑩潮i a湤n pr潤畣瑩癩vyⰠ 瑨t mfC
獣桥浥⁷楬氠扥⁥湨a湣edK

(a) Cash Payout

The changes are as follows:

(i)

The cash payout rate will be increased
from 30% to 60% for up to $100,000
of qualifying expenditure, from YA
2013.

(ii)

The cash payout
option
will be
extended from YA 2013 to YA 2015.
The
cap on the quantum of qualifying
expenditure that can be converted into
cash cannot be combined across the 3
YAs.

(iii)

Businesses may
opt for the

cash payout
any time after the end of each financial
quarter, but no later than the due date
Sections


14D, 14DA,
14R, 19B, 19C

and

37
I


[Clauses 14,
15, 19, 22, 23
and 32]



Miscellaneous
amendments

Sections 14E,
19, 19A, 20
and 37L

[Clause 51]

2


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


for the filing of its

income tax return
for the relevant
YA
.


(b)

Training


(i
)

External certification of qualifying in
-
house training courses will not be
required for PIC claims of up to
$10,000 per YA.

(ii
)

PIC claims will be allowed on training
expenditures incurred for Qualifying
Persons. A list of qualifying persons
will be
prescribed

in the subsidiary
legislation.
Qualifying persons are

insurance agents, financial advisers,
remisiers, real estate agents
and taxi
hirers. The list will be updated where
necessary.


(c) R&D Expenditure

Expenditure incurred on
R&D cost
-
sharing
agreements may qualify
as R&D expenditure.
The qualifying expenditure will be at 60% of
the shared costs, similar to outsourced R&D.


(d)Investments in Automation Equipment
&
Intellectual Property Rights (“IPRs”)

The cash payout will be extended to cover
qualifying automation equipment
and IPRs
acquired on hire purchase
or by instalments
with repayment schedule straddling two or
more fin
ancial years.

Changes (b), (c) and (d) will take effect from
YA 2012.

3


Provision of
certainty of non
-
taxation of
companies’
ga楮猠
䝡楮猠摥物癥搠晲潭o 瑨t 摩獰d獡氠潦o 潲摩湡ry
獨s牥猠by
a 煵a汩fy楮g 摩癥獴s湧
c潭灡o
y

睩汬
湯琠 扥 瑡ted
Ⱐ 楦i 瑨攠
煵q汩fy楮g
摩癥獴dn朠
c潭灡oy 桡搠桥汤la琠汥as琠㈰2 潦o瑨攠潲摩湡ry
pec瑩潮‱㍚

xC污畳l‱ㅝ

3


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


on disposal of
equity investments

shares in the investee company for a
continuous period of at least 24 months

prior
to the disposal of the shares
.
This certainty of
non
-
taxation measure
is applicable

to
disposal
s

of
ordinary
shares
made during the
period from

1 June 2012 to 31 May 2017

(both dates inclusive)
.


For share disposals in other scenarios, the tax
treatment of the gains/ losses arising from
share disposals will continue to be determined
based on the facts and circumstances

of the
case.

4


Enhancement to
the Earned Income
Relief
(“EIR”)

呯q e湣潵牡来 e汤敲ly 睯w步牳r 瑯t 獴sy
e浰moyed a湤 瑯t 灲潶p摥 浯牥 獵灰潲琠 瑯
桡湤楣n灰p搠睯w步牳Ⱐ瑨攠a浯畮m 潦o
bfo

and
䡡湤楣n灰e搠
bfo

睩汬⁢ ⁩湣 ease搮d


周q 瑡扬t 扥汯眠獨潷猠瑨攠牥癩獥搠a浯畮m 潦o
bfo⁡湤n䡡湤楣a灰p搠d䥒⸠

Age Group

EIR

Handicapped
EIR

Below 55

$1,000

$
4,000

55 to 59

$
6,000

$
10,000

60 and
Above

$
8,000

$
12,000

This change will take effect from YA 2013.

Section 39

[Clause 35]

5


Enhancement to
Renovation and
Refurbishment
Deduction


To help businesses that need to renew and
refresh their premises regularly to remain
competitive, the
section 14Q
deduction
scheme
for qualifying renovation and
refurbishment costs
will be made a perma
nent
feature of the tax regime. The existing
expenditure

cap

(which applies for every
three
-
year period) will be doubled to
$300,000.

A n y u n a b s o r b e d s e c t i o n 1 4 Q
S e c t i o n s

1 4 Q

a n d

3 7 C

[ C l a u s e s 1 8
a n d 3 1 ]

4


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


deduction will be allowed
for

transfer under
the Group Relief system.

These changes will
take
effect from YA 2013.

6


Enhancement to
the Mergers and
Acquisition
(“M&A”)

pche浥

呯q 晵f瑨t爠 獵灰潲琠 co浰慮楥猠 ca牲y楮g 潵o
䴦䄬A 瑨攠 獣桥浥m w楬氠 扥 e湨n湣e搠 a猠
景汬潷猺f


⡡⤠
q牡湳nc瑩潮o c潳瑳 楮c畲ued 潮o 煵q汩fy楮朠
䴦䄠

䄠㈰〥 瑡t al汯睡湣e 睩汬 扥 g牡湴敤n潮o瑨t
瑲t湳nc瑩潮oc潳瑳

楮捵ired渠煵 汩fy楮g⁍C䄬
獵扪ec琠瑯ta渠ex灥湤楴畲u ca瀠潦o␱〰ⰰ〰A灥r
奁⸠周q
瑡t a汬潷once o渠瑨攠瑲a湳nc瑩潮o
c潳o
楳⁴漠扥⁷ 楴瑥渠摯t渠楮湥

yea爮


⡢E⁑畡汩fy楮g⁍C䄠

⡩E
䅣煵楳q瑩潮⁴桲潵o栠h畢獩摩慲楥i


周q ac煵楲楮g c潭灡oy 浡y ac煵楲e 獨sre猠潦
瑨攠 瑡tge琠 c潭灡oy 瑨t潵o栠
浵m瑩灬攠 瑩e牳r
楮獴ea搠 潦o 橵獴 潮o 瑩er
Ⱐ 潦o 睨潬wy
-
潷湥d
獵扳s摩慲楥献i


⡩椩E
呡rge琠c潭灡oy


周q 牥汥la湴n c潮摩o楯湳i 瑨慴t 瑨攠 瑡t来t
c潭灡oy ha猠瑯t 獡瑩獦y
浡y 扥 sa瑩獦楥搠by
any 潦o 瑨攠 浵m瑩灬攠 瑩e牳r 潦o 睨潬wy
-
潷湥d
獵扳s摩慲楥猠潦o瑨攠瑡t来t c潭灡oy
Ⱐ楮獴ea搠潦
橵獴湥
-
瑩e爠潦⁷桯汬y
-
o睮w搠獵扳d摩慲楥i



⡣)

Extension of scheme

The scheme is ext
ended to complement
existing Headquarter

(HQ)

incentive schemes
so as to facilitate

growth of HQ functions in
Singapore. The condition that the acquiring
company must be held by an ultimate holding
company incorporated in, and a tax resident
of, Singapore
may be waived by
the
tax
incentive administering agency (such as
Section 37L

[Clause
33]

5


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


Economic Development Board), subject to
conditions.


These changes will take effect for qualifying
M&A completed during the period of 17
February 2012 to 31 March 2015.

7


Enhancement to
the Double Tax
Deduction for
Internationalisation
Scheme

To encourage our SMEs to venture abroad,
and to reduce administrative burden on
businesses,
businesses

will be able to claim
tax deduction of up to 200% on qualifying
expenditure, without the need for approval
from International Enterprise Singapore
or
Singapore Tourism Board
. The amount
of
expenditure
claimable is up to
$100,000
per
YA, incurred on the fo
llowing four activities:

(i)

Overseas business development
trips/missions;

(ii)

Overseas investment study trips/missions;

(iii)
Participation in overseas trade fairs; and

(iv)

Participation in approved local trade fairs.


Internati
onal Enterprise Singapore

or
Singapore Tourism Board
will continue to
approve claims, on a case
-
by
-
case basis, made
by businesses that require larger funding
support in excess of $100,000, or on
qualifying expenditure incurred on other
qualifying activities.


These changes will t
ake effect for qualifying
expenditure incurred on or after 1 April 2012.

Sections

14B

and
14K

[Clauses 13
and 17]

8


Simplification of
capital allowance
claims

To further ease the claiming of capital
allowances, the full cost of each asset that
may be written down in one year will be
increased to no more than
$5,000
,
with effect
from YA2013
.

Section 19A

[Clauses 21]

9


Exemption of
To bring Singapore’s tax regime on par with
pec瑩潮猠

6


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


vessel disposal
gains derived
by
qualifying ship
operators and ship
lessors from tax

other maritime nations and provide certainty
to the maritime sector, qualifying ship
operators and ship lessors under the Maritime
Sector Incentive (“MSI”) a
睡牤猠 睩汬 扥
gra湴敤n瑡t exe浰m楯i a畴潭a瑩ca汬yⰠ睩瑨潵w
瑨攠湥e搠瑯t 潰琠景f 瑨e exe浰m楯i
Ⱐ潮o ga楮猠
晲潭⁴桥⁤楳灯獡氠潦⁶l獳e汳⸠


周q ga楮猠f牯洠瑨攠摩獰潳o氠潦o
癥獳敬猠畮uer
c潮獴牵r瑩潮o a湤n 湥眠b畩u摩湧 c潮瑲oc瑳t
睩汬
a汳漠 扥 exe浰m

晲潭o tax
⸠ c潲o 獨楰s 汥獳潲s
畮摥爠 瑨攠
䵓f
-
M
a物瑩re
i
ea獩湧 ⡓桩瀩
a睡牤Ⱐ瑨e
瑡t
exe浰m楯渠
a汳漠
a灰汩e猠瑯tga楮i
晲潭⁴桥⁤楳灯獡氠潦⁦潲e楧渠癥獳e汳⸠

周q 瑡t exe浰m楯渠 摯d猠 湯琠 a灰py 瑯t 条楮i
摥物癥搠
-


(a)

f
rom the carrying on of
a
business of
trading in ships or co
nstructing ships for
sale;

or

(b)

u
nder a finance lease which is treated as
a
sale for
income
tax purpose.


These changes will take effect from the
commencement of MSI on 1 June 2011.

13A, 13F and
13S

[Clauses 4, 5
and 9 ]

10


Exemption
and
waiver
of
the
obligation to
withhold tax on
charter fees
payments

To enhance Singapore’s competitiveness as an
f湴n牮r瑩潮o氠 Ma物瑩re Ce湴牥 a湤n re摵de
扵獩湥獳s c潳瑳 景f 獨楰 c桡牴rre牳Ⱐ 扡re扯b琬
癯ya来 a湤 瑩浥m cha牴r爠
灡y浥湴猠 浡me 瑯
湯n
-
牥獩摥湴s

⡥xc汵摩湧 灥牭rne湴
e獴慢汩s桭敮瑳h
楮i p楮ia灯牥
)

景爠 瑨攠 畳e 潦
獨楰s 睩汬 扥
exe浰me搠 晲潭o 瑡t

maye牳
浡歩湧
c桡牴rr

灡ymen瑳t 瑯t 瑨攠 灥牭rne湴n
e獴慢汩s桭敮琠
楮i p楮iap潲o
潦o a 湯n
-
牥獩摥湴
a牥⁡汳漠湯琠te煵楲q搠瑯⁷楴桨潬搠hax⸠


周楳qc桡湧n 睩汬 瑡步 e
晦ec琠景f a汬 灡yme湴n
pec瑩潮猠

ㄳ⁡湤‴㕁

xC污畳l猠㌠s湤n
㐲4

7


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


liable to be
made on or after 17 February
2012.

11


Enhancement to
the Maritime
Sector Incentive


䵡物瑩re iea獩sg
⡃潮瑡楮E爩⁁ a牤

呯q灲潭潴攠瑨攠g牯r瑨to映c潮瑡楮o爠汥l獩sg 楮i
p楮ia灯peⰠ 瑨攠 景汬潷楮f e湨nnce浥湴猠 睩汬
扥 浡摥 瑯t 瑨攠 Mpf
-
Ma物瑩re iea獩s朠
⡃潮瑡楮E爩⁡睡牤㨠

⡩E

Income derived from the leasing of
intermodal equipment (e.g. trailers) which
is incidental to the leasing of
qualifying
containers will also enjoy the
concessionary tax rate of 5% or 10% from
YA 2013; and

(ii)

The qualifying containers will refer to
containers that adhere to the standards
defined by the ISO, IICL or
any other
equivalent organisation from YA 2013
.

Sec
tion 43ZA

[Clauses
40
]

12


Extension
and
Enhancement
of
the Aircraft
Leasing Scheme
(“ALS”)


呯qc潮瑩湵n 瑨t 灲潭潴p潮o潦oai牣ra晴f 汥a獩s朠
ac瑩癩v楥猠 楮i p楮ia灯牥I 瑨攠 Aip 睩汬 扥
ex瑥湤t搠瑯d
㌱⁍P牣栠㈰ㄷ



m牥癩潵vlyⰠa渠
Aip reci灩敮琠桡
d

瑯t a灰py 瑯
fo䅓A 睩瑨w渠 潮o 浯湴栠 晲潭o 瑨攠 摡瑥t 潦o
ac煵楳q瑩潮o 潲o 瑲t湳晥爠 潦o 楴猠 a楲i牡晴
Ⱐ 楦i 楴
睩獨w搠 瑯t ex瑥湤t 瑨攠 湵浢敲 潦o yea牳r 潦
睯w歩湧k汩晥 o映瑨攠a楲ira晴f景f 瑨攠灵p灯獥 of
ca灩pa氠a汬潷once c污業
⸠呯qea獥 c潭灬楡湣eI
瑨攠a灰汩ca瑩潮o 灲潣e獳s
i猠牥浯癥搠a湤n Aip
牥c楰ie湴猠浡y
浡me an 楲ie癯va扬攠elec瑩潮
景f 瑨攠
ex瑥湳楯渠 潦o
湵浢敲 潦o yea牳r 潦
睯w歩湧 汩fe
I

a琠瑨攠瑩浥 潦o瑨敩t 瑡t 晩汩湧 景f
瑨攠


牥污瑩湧 瑯t 瑨攠扡獩s 灥物潤r 楮i
睨楣h
瑨攠 a楲i牡晴 睡s ac煵楲e搯

瑲t湳ne牲e搮d 周e
c桡nge⁩猠 晦e
c瑩癥⁦ 潭oㄠ䵡牣栠㈰ㄲh

pec瑩潮
s



Ⱐ㐳夬‴㍚

xC污畳l猠㈰Ⱐ
㌸P
a湤″n
]

13


Enhancement to
the withholding tax
exemption regime
To enhance the withholding tax regime,
banks, finance companies and approved
entities will not need to withhold tax on
Section 45I

[Clause 44]

8


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


for banks

interest and other
S
ection 12(6)
payments
(

煵q汩fy楮g 灡yme湴
s


浡摥 瑯t
m䕳b 楮
p楮ia灯pe⸠
周q m䕳b 楮 p楮ia灯牥 睩汬 扥
a獳敳獥搠 潮o 瑨攠 灡yme湴猠 楮i 瑨敩t a湮畡l
楮捯浥 瑡t 牥瑵牮t
Ⱐ畮ue獳s 瑨攠灡y浥湴猠a牥
獰sc楦楣a汬y⁥xe浰m⁦ 潭⁴慸



周楳⁣桡nge⁷楬 ⁴慫 e晦ec琠景t㨠

⡩E

qualifying
payments
liable
to be made
from 17 February 2012 to 31 March 2021
(for contracts already in force before 17
February 2012); and

(ii)

qualifying

payments arising from contracts
entered into during the period from
17

February 2012 to 31 March 2021.


14


Enhancement to
Real Estate
Investment Trusts
(“REITs”)

呯qe湨n湣e 潵爠瑡t 牥gi浥m景f obf味Ⱐa obfq
瑨慴t浡步猠
摩獴物扵瑩潮猠瑯t畮楴 桯汤敲猠楮i瑨t
景f洠 潦o 畮楴猠 ca渠 co湴n湵n 瑯t e湪ny 瑡t
瑲t湳灡牥ncy
⸠周楳q楳i 獵扪ec琠瑯t 瑨攠景汬潷楮朠
c潮摩o楯湳i

⡩E

Before the distribution, the trustee of the
REIT grants the unit holders the option to
receive the distributions either in cash or
units in that REIT; and

(ii)

On the date of distribution, the trustee of
the REIT must have sufficient cash to
make the entire distribution fully in cash
had no option been given to those unit
holders to receive the distribution in units
in that REIT.


Unit holders that elect to rece
ive distributions
in units will be taxed in the same manner as if
they had received the distribution in cash. This
change will take effect for distributions made
on or after 1 April 2012.

Section 43

[Clause 37]

9


s/n.

Legislative
Change

Brief Description of Legislative Change


Amendment
to Income Tax
Act

[Clause in
Income Tax
(Amendment)
Bill]


15


Enhancement to
the definition of
research
and
development
(“R&D”)

oec潧湩獩ng 瑨攠c潭oerc楡氠牥a汩ty 瑨慴t獯浥
潦o 瑨攠
c潭灵oe爠
獯晴睡re 摥癥汯灭e湴n
睯wk
睩汬
湯n

扥 灵琠異u景f 獡le 景f c潭oerc楡氠a湤
灲潰p楥瑡ry 牥a獯湳s 瑨攠 浵m瑩灬p
-
獡汥l
牥煵楲q浥湴m 景爠
獯晴sa牥 摥ve汯灭e湴n
瑯t
煵q汩fy a猠sC䐠睩w
氠扥⁲e浯癥搮


Section 2

[Clauses 2]

16


Extension of the
filing and payment
deadline for
withholding tax

To
give payers more time to comply with the
withholding tax obligations
, payer
s

will be
allowed
one additional month to file and pay
the tax.


This change will take effect for payments
liable to be
made to non
-
residents on or after 1
July 2012.

Sections

45

and

45D

[Clauses 41
and 43]




10



SUMMARY TABLE ON PROPOSED NON
-
BUDGET CHANGES TO
THE INCOME TAX ACT


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


1


Refinement to
tax deductible
donation rules

There is currently lack of
consistency in how the
deduction is apportioned against exempt income.
We
propose to amend the Act such that with
effect from Year of Assessment (“YA”) 2013,
瑨攠䝯癥牮浥湴n 睩汬 湯琠a瑴物扵瑥

摯湡瑩潮猠瑯
瑡t exe浰m 楮捯浥⸠䅬A 摯湡瑩潮猠睩汬 瑨畳t 扥
摥摵d瑥搠潮oy aga楮獴 瑡xa扬攠楮捯浥⸠周楳qa汳l
enhances donors’ tax savings fr
潭o瑨攠摥摵c瑩潮o
景f 瑨敩t 摯湡瑩潮o a湤n ca渠 e湣潵oa来
灨楬a湴桲潰yK

pec瑩潮猠

ㄳ䠬1
ㄳ嘬1
㌷Ⱐ
㌷P⁡湤n
㌷P

xC污畳l猠㘬s
㄰Ⱐ㈹Ⱐ㌰⁡湤n
㌴P


䵩Mce汬a湥潵猠
a浥湤浥湴n

pec瑩潮猠ㄳⰠ
ㄳ伬‱㍐Ⱐ
ㄳ唬‱㍗Ⱐ
ㄳ堠1湤‱㍙

xC污畳l‵ㅝ


䕣潮潭oc
䕸灡湳楯n
fnce湴n癥猠
⡒E汩e
映f牯洠
fnc潭攠oax⤠
䅣琠


獥c瑩潮o
㤷䴠

xC污畳l‵㉝

2


Enhancement
to

CPF
Minimum Sum
Topping
-
Up
(“MSTU”)
pc桥浥

周q M
楮i浵m p畭u q潰灩湧
-


pche浥m 桡s
扥e渠灲pgre獳s癥ly 汩扥ra汩獥搠潶o爠瑨攠yea牳r 楮i
瑥t浳m潦o瑨攠扥湥晡c瑯牳⽢敮L晩f楡物r猬s 瑡t 牥汩e映
a湤n 瑯t
-
異u 汩浩瑳⸠ 周楳 灲潰p獥搠 a浥湤浥湴
汩扥牡汩獥猠 瑨攠 M
楮i浵m p畭u
q
潰灩湧
-
r
p

pc桥浥mby ex瑥湤楮朠瑡x 牥汩e映景f ca獨s瑯t
-
異u
浡摥⁴漠灡 e湴
s
-

-
污l⁡湤⁧ra湤灡re湴n
-

-
污lK

pec瑩潮″o

xC污畳l″㕝

11


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


3


Tax e
xemption
of receipt of
W
orkfare
payments

The various Workfare payments (i.e.
Workfare
Income Supplement
payouts,
Workfare Bonus
Scheme payouts, the Workfare Special Payment,
and the Workfare S
pecial Bonus
) are intended to
supplement the income of lower
-
wage workers
and encourage them to stay at work.


The amendment
exempts
Workfare payments
from tax

in the hands of the recipients
.

Section 13

[Clause 3]

4


Tax e
xemption
of National
Service
Recognition
Award

The
National Service Recognition Award

was
announced in 2010 to provide sustained
recognition to Singapore citizens who serve
National Service. The total value of the
National
Service Recognition Award
, paid
out in three
tranches, is between $9,000 and $10,500 for each
National Serviceman by the time he completes
h
is Operationally Ready NS
training cycle. The
first tranche is deposited in the serviceman's Po
st
Secondary Education Account
while the second
and t
hird tranches are paid into the CPF accounts

The proposed amendment exempts
NSmen from
tax on
the
National Service Recognition Award

granted to them in recognition of their National
Service.

Section 13

[Clause 3]

5

2
0

Extension of
the

tax

treatment of
Scottish
Limited
Partnership
(SLP) members
of

Lloyd
’s

sy湤楣nte⁴

瑨t

i業楴e搠
i楡扩汩ty
呯q ac桩敶h 灡物ry o映瑲ta瑭e湴n ac牯獳r 摩晦ere湴n
partnership members of Lloyd’s syndicate,
瑨t
current tax treatment for Lloyd’
猠pim 浥浢m牳
will be extended to Lloyd’s LLP members
1
. The
LLP members

of Lloyd’s syndicate will be
瑡te搬da琠瑨t 灡牴湥牳桩瀠汥癥氬la琠瑨攠湯n
-
牥獩摥湴s
湯n
-
楮摩癩摵慬v 瑡t 牡瑥t 睩瑨潵w any 灡牴楡氠瑡t
exe浰m楯渮i 周qy may al獯s扥 e汩g楢ie 景f 瑨t 瑡t
楮捥
湴n癥猠 a灰汩ca扬e t漠 楮獵牡湣e c潭灡湩os

⡩⹥⸠ c潮oe獳s潮ory 瑡t 牡瑥t
潲o瑡t exe浰m楯渠
景f
煵q汩fy楮g 楮捯浥 f牯洠
楮獵牡湣e a湤
pec瑩潮′㙁

xC污畳l′㑝

††††††††††††††††††††
††††

1

Currently, only LLPs registered in the UK can be members of Lloyd’s syndicate.

12


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


Partnership

(LLP)
members

reinsurance business, and the tax deduction for
special reserve of approved general insurer)
,
subject to meeting the incentive
conditions
.


These proposed changes will take effect from
YA 2008, which was the time when Lloyd’s
sy湤楣nte⁦楲獴⁡摭s瑴e搠䱌m敭扥牳⸠

S


Introduction of
review date for
tax deduction
for expenditure
incurred for
R&D projects
approved by
EDB under
section 14E


Section 14E was introduced in Budget 1980
to
grant deduction
for selective R&D projects
approved by the Economic and Development
Board (“EDB”). Section 14E confers
異u 瑯t

㈰〥 摥摵d瑩潮o
景f

ex灥湤楴畲u 楮捵i牥搠 潮o
a灰牯pe搠o♄C 灲潪pc瑳⸠周q牥 楳i c畲ue湴ny 湯
牥癩敷⁤ te⁦潲⁓ec瑩潮‱㑅⸠


䄠牥癩敷 摡瑥t潦o㌱P䵡r ㈰ㄵ

景f 瑨攠摥摵d瑩潮



楮i牯摵re搠瑯t
a汬潷o畳u瑯t
牥癩敷 瑨攠楮ie湴n癥
楮⁡⁴業ely慮湥爮r

pec瑩潮‱㑅

xC污畳l‱㙝

T


Alignment of
tax
t
reatment

for financial
instruments (on
revenue
account)
with
the

new
accounting
standards for
small en
titie
s

With effect from 1 Jan 2011,
eligible entities

may prepare their financial accounts using the
Singapore Financ
ial Reporting Standards (FRS)

for
S
mall
Entities
.


With the
adoption of the
Singapore Financial
Reporting Standards for Small Entities
,
small
entities

will be given the option to align their tax
treatment

for their financial instruments on
revenue account,
with the new accounting
treatment so a
s to ease their compliance. This
change is similar to the option that was given to
companies when FRS39 was introduced.

Section 34A

[Clause 25]

8


Extension of
the
International
Arbitration Tax
Incentive

The International Arbitration Tax Incentive was
introduced in 2007 to encourage the provision of
international arbitration services in Singapore. It
grants a 50% tax exemption on the incremental
qualifying income derived by approved law
firms from internat
ional arbitration cases heard
Section 13V

[Clause 10]

13


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


in Singapore. The incentive expired on 30 June
2012.


The incentive will be extended, with
enhancements, for another 5 years.
Enhancements include expanding the scope of
qualifying income to include income from cases
which, if

not for the case having been settled,
would have been heard in Singapore.

9


Enhancement
to tax
deduction
regime for
donations

Amendments are made to allow tax deduction to
(a) donations for specified purposes; and (b)
donations
with benefits
-
in
-
return to the donor or
persons related to the donor.

(a)

Donations for specified purposes

A donation for specified purposes is one where
the donor states conditions as to the purposes for
which his donation can be applied. All donations
for specified purposes will be eligible for 250%
tax deduction if the following requirements are
satisfied:

(i)

Except where the recipient is the
Government, the specified purpose
advances an object of the recipient that
is set out in its governing instruments
;

(ii)

None of the specified purposes must be
to advance the interests (whether
directly or indirectly) of a particular
race, belief or religion;

(iii)

The specified purpose should not
advance the interests of particular
individuals or companies; and

(iv)

If the specifie
d purpose cannot be
fulfilled, the recipient should be
authorised to apply it to advance other
charitable objectives in its governing
Section 37

[Clause 29]

14


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


instruments; and

(v)

The donation must be made to a
qualifying recipient

of tax deductible
donations.

(b)

Donations with benefits
-
in
-
return to the
donor or parties related to the donor

It is common to receive some benefit for
donations made to qualifying recipients. The
donations net of the value of the benefit

received
will be eligible for 250% tax deduction.

The basis of determining the value of the benefit
will be determined through consultation and
provided for in the subsidiary legislation.



10


Refinement to
Working
M
other
’s Child
o
e汩ef


佮l 潦o 瑨攠 c潮摩o楯湳i 潦o c污業l湧
t潲歩湧o
Mother’s Child Relief

楳⁴桡琠瑨攠c桩h搠桡猠瑯 扥 a
p楮ia灯pe ci
瑩ze渠a猠a琠Pㄠ䑥ce浢m爠潦o瑨攠
yea爮
䅳Aa 牥獵汴Ⱐ睯w歩湧 m潴桥o猠睨潳w c桩h搠桡搠
灡獳敤⁡way⁢ 景fe″ ⁄ece浢m爠潦⁴桥 yea爠r楬氠
湯琠扥⁡扬攠b
漠o污業⁴桥⁲e汩e昮



The change seeks to remove the unintended
effect of the “as at 31 Dec” condition so that

睯w歩湧
m
潴桥o猠睩汬 扥 a扬攠瑯t c污業l
t潲歩湧
Mother’s Child Relief


a c桩h搠睨漠桡猠灡獳敤
a睡y⁩渠 桥
yea爠灲ece摩湧⁴桥
re汥癡湴n



c楦瑨i
pc桥摵汥

xC污畳l‵そ




Provision of
powers for
Minister for
Finance to
delegate his
authority to

approve

an
amalgamation

of companies
under section
34C

The tax framework under Section 34C is
intended to give effect of tax neutrality to

qualifying amalgamat
ions as if there is
no

cessation of the existing businesses

by the
amalgamating companies (and hence no
acquisition of new businesses by the
amalgamated company),

and all assets

and
liabilities that exist prior to the amalgamation are
transferred and veste
d in
the amalgamated
company.


Section 34C

[Clause 26]

15


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


A qualifying amalgamation is defined as any

amalgamation of companies that are made
pursuant to
section 215F of the Companies Act,
section 14A of the Banking Act,
and such other
amalgamation of companies as the Minister may

approve.


To

facilitate the processing of applications made
for an amalgamation to be treated as a qualifying
amalgamation under section 34C, the definition
of “qualifying amalgamation” will be amended

瑯t a汬潷o 䵩湩獴敲 瑯t
de汥ga瑥t 桩猠 a畴桯物uy 瑯
獵s栠
灥牳潮⁡猠瑨攠䵩湩獴e爠浡y⁡灰潩湴






Repeal of
certain
provisions
related to
imputation
system

With the abolition of the imputation system, and
the move to one
-
tier corporate income tax
system, provisions relating to tax treatment for
exempt dividends ceased to have effect from 1
Jan 2008.
Certain of t
hese sections are repealed,
with consequential c
hanges made to section 107
of the I
ncome
T
ax
A
ct
.

The other provisions will
be repealed in due course.

Sections

13, 13I, 13K
and 107

[Clauses 3, 7,
8 and 48]

13


Removal of
certain tax
provisions
relating to
Hindu Joint
Family

With the removal of registrat
ion of a H
indu Joint
Family

in the Business Registration Act in 2002,
it is no longer possible to register a H
indu
J
oint
F
amily

locally. Accordingly,
the I
ncome
T
ax
A
ct

is amended to align with
the Business
Registration Act.

Sections

2, 26A, 35,
36, 37,
39, 42,
43, 61, 63 and
Second
Schedule

[Clauses 2,
24, 27, 28, 29,
35, 36, 37, 45,
46 and 49]

14


Refinement to
tax
deductibility of
voluntary
contributions

made by an
Eligible
companies (
SEP principals e.g. taxi
companies
)

are allowed tax deduction on

qualifying
voluntary contributions

made by them

to
the Medisave Accounts of SEPs (e.g. taxi
hirers)
. The SEPs are also exempted from tax on
these contributions.

To qualify for ta
x
Section 14

[Clause 12]

16


s/n.

Legislative
Changes

Brief
Description of Legislative Changes


Amendment
to Income
Tax Act
[Clause in
Income Tax
Amendment
Bill]


eligible
company

to
the
Medisave
Account of
a
Self Employed
Person (“SEP”)

摥摵d瑩潮Ⱐa
癯汵湴ary c潮瑲楢畴楯渠浡摥 by an
e汩g楢ie c潭灡oy 瑯t 瑨攠䵥摩獡癥 䅣c潵湴o潦oa
p䕐 e摳⁴漠扥⁴慸
exe浰m⁩湣潭
潦⁴桥⁓䕐K


周楳qa浥湤浥湴n
a汬潷猠a 癯汵湴ary c潮瑲楢畴楯渠
浡摥 by a渠e汩g楢ie c潭灡oy 瑯t 瑨攠䵥摩獡癥

䅣c潵湴o潦oa p䕐 瑯t扥 瑡t 摥摵d瑩扬b

睩瑨潵w a
牥煵楲q浥湴m景爠楴 瑯t扥 瑡t
exe浰m 楮捯浥 潦o瑨攠
p䕐Ⱐ獵扪ec琠t漠o潮摩o楯i献