Singapore Budget 2023 - Introduction
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:
- the Pioneer Certificate Incentive,
- Development and Expansion Incentive, I
- Investment Allowance scheme, Qualifying Debt Securities scheme, and
- Financial Sector Incentive scheme.
Enterprise Innovation Scheme
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.