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The Singapore 2023 Budget was held on Valentine’s Day, the 14 February 2023.
The aim of the 2023 Budget was to support businesses and households to overcome challenges caused by inflationary pressures and global uncertainty while upholding fiscal prudence.
As part of this effort, the government intends to implement OECD Pillar 2 measures and a domestic top-up tax to ensure a minimum effective tax rate of 15% for multinational enterprise groups in Singapore starting from January 1, 2025.
To maintain competitiveness, Singapore will extend and enhance various tax schemes, including:
Additionally, a new Enterprise Innovation Scheme will be introduced to incentivize businesses to engage in research and development, innovation, and capability development activities. Businesses can qualify for tax deductions or allowances of up to 400% of qualifying expenditure, subject to a cap of $400,000.
They may also choose a non-taxable cash pay out of 20% on up to $100,000 of total qualifying expenditure across all qualifying activities per year of assessment, in lieu of tax deductions or allowances.
Furthermore, higher marginal buyer’s stamp duty rates have been introduced for high-value residential and non-residential properties from February 15, 2023.
The buyer’s stamp duty rates are up to 6% for residential properties and 5% for non-residential properties. These changes are consistent with enhancing the fairness and resilience of Singapore’s tax system.
If you have any queries relating to the Singapore Budget, or Singaporean tax matters more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.
The South Korean government passed a proposed bill in December 2022 that includes some changes to tax laws and enforcement decrees.
Here are the key changes that may affect foreign businesses and investors in South Korea.
Starting on January 1, 2023, the tax rate for each of the four corporate income tax brackets is cut by 1% to promote investment and job creation by businesses.
Starting on January 1, 2024, a parent company may consolidate its subsidiaries in Korea in its tax return if the parent directly and indirectly holds 90% of the issued and outstanding shares (excluding treasury shares). Before the amendment, the shareholding requirement was 100%.
Starting on January 1, 2023, a foreign worker may elect to apply the flat 19% rate (20.9% including local income tax) on his/her personal income tax for 20 years from the date he/she first started working in Korea.
Previously, it was limited to 5 years.
Starting on January 1, 2023, loss carry forward is increased to 80% of the net loss in a given fiscal year.
For small and medium-sized enterprises, it remains the same at 100%.
Starting on January 1, 2023, any dividends received by a company from another domestic company may be excluded from its taxable income according to the rates provided in a table.
In addition, any dividends received by a company from another foreign company may be excluded from its taxable income instead of getting a foreign tax credit if it meets certain criteria.
Starting on January 1, 2023, the five existing employment tax credits will consolidate into two employment tax credits.
For a new regular hire, a higher tax credit is given for hiring the young, the old, the disabled and career-interrupted women.
Foreign workers are excluded.
The timeline of the securities transaction tax reduction has been adjusted.
The imposition of 20% tax on income from transferring or lending digital assets has been postponed by two years and is scheduled to begin on January 1, 2025.
If you have any queries relating to the South Korea Budget, or Korean tax matters more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.
Measures announced in the 2021 Federal Fall Economic Update will be implemented by Bill C-8. On 4 May 2022, this Bill passed its third reading in the House of Commons on 4 May 2022.
Its contents will enact measures including:
Other measures are also included.
The first reading of the Bill took place on December 15, 2021.
The new Bill will include a refundable 25% tax credit for qualifying entities, which have qualifying expenditures for air quality improvements. This expenditure must have been incurred between 1 September 2021 and 31 December 2022.
Qualifying entities will include both unincorporated sole proprietors and Canadian-controlled private corporations with taxable capital employed in Canada of less than $15 million in the tax year directly preceding it.
A maximum of $10,000 is available in qualifying expenditures per qualifying location. The credit is capped at a maximum of $50,000 across all qualifying locations. It should be noted that these two ‘caps’ are shared amongst affiliated businesses.
The contents of the bill also includes the new refundable tax credit to return fuel charge proceeds from pollution pricing directly to farming businesses in certain provinces.
These provinces include Ontario, Manitoba, Saskatchewan and Alberta. The scheme started in 2021.
The refundable tax credit is available to taxpayers who are actively engaged in either the management or day-to-day activities of farming. This includes farming enterprises that are carried out through a partnership.
A qualifying farming business must incur total farming expenses of $25,000 and those expenses must be at least partly attributable to the provinces mentioned above.
The bill also includes the proposed legislation behind the Underused Housing Tax Act. This legislation will result in an annual tax of 1% on the value of vacant or underused Canadian residential real property.
The property must be owned either directly or indirectly owned by non-resident non-Canadians.
The new annual tax applies beginning in the 2022 calendar year.
If you have any queries about this article, the Canada Federal Fall Update, or the matters discussed more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.