Singapore unveils Budget 2024 with an emphasis on international tax compliance, business competitiveness, and supporting local workforce development, among other priorities.
Finance Minister Lawrence Wong delivered the Singapore Budget 2024 address on February 16th, outlining financial strategies for the upcoming year. Many businesses are closely watching developments as shifts in budget allocations and policies offer a roadmap for adapting their own plans. Here’s a breakdown of the most impactful changes for businesses in Singapore:
International Tax Landscape (BEPS 2.0)
Singapore plans to align its corporate income tax regime with Pillar 2 of the international BEPS 2.0 framework. Key components include:
- Income Inclusion Rule (IIR): For multi-national enterprises headquartered in Singapore, overseas profits might be subject to a minimum effective tax rate of 15%.
- Domestic Top-up Tax (DTT): MNEs operating in Singapore may also need to pay a 15% minimum effective tax rate on their Singapore profits.
- Both the IIR and DTT come into effect on January 1, 2025.
Business Support
A new S$1.3 billion Enterprise Support Package offers several benefits:
- Tax Rebate: Companies get a 50% corporate income tax rebate capped at S$40,000.
- Enhancements to Enterprise Financing Scheme (EFS): Larger working capital loans, extended support for trade and domestic construction loans.
- SkillsFuture Enterprise Credit Extension: Provides funding for workforce development initiatives through June 2025.
New Refundable Investment Credit (RIC)
Singapore will introduce a new Refundable Investment Credit (RIC) to draw major investments across a range of sectors like manufacturing, digital services, innovation, and the green transition. This tax credit includes a refundable option allowing for unutilised credit to be refunded in cash.
Hiring Foreign Workers
Companies hiring foreign workers must now pay local employees at least a S$1,600 full-time monthly wage or a S$10.50 hourly rate for part-time employees. These increased requirements go into effect from July 1, 2024.
Get in touch
These are just some highlights from Singapore’s extensive budget changes. If you’d like to explore how your business can adjust and take advantage of these new measures, contact our tax and business advisory team at Alpadis Group for in-depth consultation.