March 2010:

2010 Singapore Budget Highlights

CORPORATE TAX

• No change to corporate tax rate which remains at 17%. 
• New Productivity and Innovation Credit that allows 250% tax deduction for 6 activities comprising expenditures each capped at $300,000 related to R&D, design, acquisition and registration of IP rights, automation and training.
• New Merger and Acquisition allowance at 5% of the value of acquisition subject to a cap of $5m of allowance claimable over 5 years including a stamp duty waiver capped at $200,000 on transfer of unlisted shares.
• Phase out Industrial Building Allowance to be replaced by the Land Intensification Allowance incentive which will be granted to businesses that construct qualifying buildings or structures belonging to 9 specific industry sectors.
• New tax deduction for angel investors up to 50% of the investment capped at $500,000.
• Enhance Financial Sector Incentive by removing the Qualifying Base for Financial Institutions, and increasing the concessionary tax rate from 10% to 12% under the FSI-Standard Tier incentive.
• Streamline the tax incentives given to members of SGX and SICOM under the Financial Sector Incentive.
• Extend and enhance the listed real estate investment trusts concessions.
• Remove Approved Start-up Fund Manager Scheme.
• Review of tax concession for offshore insurance business by introducing a sunset clause and a new headcount requirement.
• Extend Maritime Finance Incentive for a further 5 years to 31 March 2016.
• New 10% tax incentive for ship brokers and Forward Freight Agreement traders. 
• Include ship management fees under Section 13A of Income Tax Act and the Approved International Shipping Enterprise Scheme.
• Extend qualifying registered Business Trusts concession another 5 years to 31 March 2015.
• Renew and enhance Investment Allowance scheme for aircraft rotables for another 5 years to 31 March 2015.

PERSONAL TAX

• No changes in personal tax rates with highest rate at 20%.
• Reduce withholding tax rate from 15% to 10% for non-resident public entertainers.
• Increase in parent relief.
• Expand wife relief to spouse relief.
• Waive income threshold condition for handicapped dependent-related reliefs.
• Increase income threshold condition for all other dependent-related reliefs from the current $2,000 to $4,000.
• Increase in course fee relief from $3,500 to $5,500.

PROPERTY TAX

• Replace current 4% property tax rate for owner-occupied residential properties with progressive tax rates of 0% (first $6000 AV), 4% (next $59,000 AV) and 6% (AV in excess of $65,000).

GOODS AND SERVICES TAX (GST)

• Expand GST zero-rating for marine industry.
• Defer import GST for at least one month for approved GST-registered businesses.
• Simplify GST accounting rules to allow most businesses to account for GST at the earlier of: when tax invoice is issued or when payment is received.

OTHERS

• Extend tax deduction of 250% for another year for donations made during the period from 1 January 2010 to 31 December 2010.