Singapore Budget 2019 — GC Tax Services

On 18 February 2019, Finance Minister Heng Swee Keat delivered the Singapore Budget 2019. Details to the keenly anticipated Merdeka Generation Package were announced.

On the business front, the focus remains on building deep enterprise and worker capabilities and encouraging strong partnerships within Singapore and across the world.

Included in Budget 2019 are the following key Tax changes :-

1. Personal tax rebate for Year of Assessment (YA) 2019

Item	Current Treatment	New Treatment
Personal tax rebate for YA 2019 (i.e. for income earned in year 2018)	No personal tax rebate.	A personal tax rebate of 50% of tax payable, capped at $200 is granted.

Comments : The personal tax rebate will be automatically included in the resident individual’s tax assessment.

2. Lapse the Non Ordinarily Resident (NOR) scheme

Item	Current treatment	New treatment
NOR scheme	An eligible individual granted NOR status for a 5-year period may, subject to conditions, enjoy the following tax concessions :- a) Time apportionment of Singapore employment income i.e. he/she is not taxed on the portion of Singapore employment income that corresponds to the number of days he/she spent outside Singapore for employment purposes. b) Tax exemption on his/her employer’s contribution to a non-mandatory overseas pension or provident fund.	The NOR scheme will lapse after YA 2020. The last NOR status will be granted for YA 2020 and expire in YA 2024.

Item

Current treatment

New treatment

NOR scheme

An eligible individual granted NOR status for a 5-year period may, subject to conditions, enjoy the following tax concessions :-
a) Time apportionment of Singapore employment income i.e. he/she is not taxed on the portion of Singapore employment income that corresponds to the number of days he/she spent outside Singapore for employment purposes.
b) Tax exemption on his/her employer’s contribution to a non-mandatory overseas pension or provident fund.

The NOR scheme will lapse after YA 2020.

The last NOR status will be granted for YA 2020 and expire in YA 2024.

Comments : With the scheme set to lapse, it is encouraged that the following group of high income earners come forward to evaluate their eligibility :-

· Spent at least 90 days annually outside Singapore for business reasons; and

· Total annual employment income must be at least $160,000 (exclude Director’s fees and income tax in Singapore that is borne by your employer).

Other key conditions for the NOR scheme can be found here.

3. Allow working mothers to claim Grandparent Caregiver Relief in respect of a handicapped and unmarried dependent child, regardless of the child’s age

Item	Current Treatment	New Treatment
Grandparent Caregiver Relief	Working mothers who engage the help of their parents, grandparents, parents-in-law or grandparents-in-law to take care of their young children may claim Grandparent Caregiver Relief, subject to conditions – one of which is that the child has to be 12 years old or below during the year preceding the YA of claim.	Working mothers can claim the Grandparent Caregiver Relief in respect of a handicapped and unmarried dependent child, regardless of the child’s age, subject to meeting all other conditions. This will take effect from YA 2020 (i.e. for income earned in 2019).

Item

Current Treatment

New Treatment

Grandparent Caregiver Relief

Working mothers who engage the help of their parents, grandparents, parents-in-law or grandparents-in-law to take care of their young children may claim Grandparent Caregiver Relief, subject to conditions – one of which is that the child has to be 12 years old or below during the year preceding the YA of claim.

Working mothers can claim the Grandparent Caregiver Relief in respect of a handicapped and unmarried dependent child, regardless of the child’s age, subject to meeting all other conditions.

This will take effect from YA 2020 (i.e. for income earned in 2019).

Comments : Another move to support and give recognition to working mothers. Do also note that with effect from YA 2018, the total personal tax relief is subject to an overall relief cap of $80,000.

4. Extend the Writing Down Allowance (WDA) for acquisition of qualifying Intellectual Property Rights (IPRs)

Item	Current Treatment	New Treatment
WDA on qualifying IPRs	Businesses are granted WDA on expenditure incurred in acquiring qualifying IPRs for use in its business. The expenditure can be written down over 5, 10 or 15 years. Qualifying IPRs are patents, trademarks, registered designs, copyrights, geographical indications, lay-out designs of integrated circuits, trade secrets or information that has commercial value, and grant of protection of plant varieties. The WDA is available for expenditure incurred on qualifying IPRs acquired on or before the last day of the basis period for YA 2020.	The WDA is extended to cover expenditure incurred on qualifying IPRs acquired on or before the last day of the basis period for YA 2025.

Item

Current Treatment

New Treatment

WDA on qualifying IPRs

Businesses are granted WDA on expenditure incurred in acquiring qualifying IPRs for use in its business. The expenditure can be written down over 5, 10 or 15 years.

Qualifying IPRs are patents, trademarks, registered designs, copyrights, geographical indications, lay-out designs of integrated circuits, trade secrets or information that has commercial value, and grant of protection of plant varieties.

The WDA is available for expenditure incurred on qualifying IPRs acquired on or before the last day of the basis period for YA 2020.

The WDA is extended to cover expenditure incurred on qualifying IPRs acquired on or before the last day of the basis period for YA 2025.

Comments : The extension of the scheme complement the vision to develop Singapore into Asia’s IP Hub and recognises that IPRs are important creators of value in a knowledge-based economy.

If you have any questions on the above, please feel free to contact us today!

For a recap of last year’s Budget, please see “Singapore Budget 2018”.