Singapore's budget statement on February 18 2011included changes to the productivity and innovation credit (PIC), which should encourage R&D investment and increase the country's competitiveness.Singapore's PIC, which was introduced in the 2010 budget, ...
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Singapore's budget statement on February 18 2011included changes to the productivity and innovation credit (PIC), which should encourage R&D investment and increase the country's competitiveness.
Singapore's PIC, which was introduced in the 2010 budget, allowed businesses to claim enhanced deductions or allowances equal to expenditure incurred on qualifying activities including R&D, acquisition and registration of intellectual property, and on design activities. Qualifying expenditure of R&D activities has been extended to cover expenditure on such activities performed outside Singapore.
Finance Minister Tharman Shanmugaratnam announced in March 2011 a tax deferral option for businesses to defer S$1 of tax in the current year of assessment for every S$1 of PIC qualifying expenditure incurred for the present financial year. Capped at S$100,000 ($83,000), the tax is due for payment when the first payment for the following year is assessed. The tax deferral allows businesses to enjoy PIC benefits one year in advance and helps with their cash flow and investments in productivity.
From April 1 2011, the government is exempting all interest withholding tax payments made by banks and financial institutions to non-residents. The exemption excludes permanent establishments.
The budget included a one-off 20% corporate income tax rebate for all companies for the 2011 assessment year. The rebate is capped at S$10,000. A second option for small and medium enterprises (SMEs) is a cash grant of 5% of the company's revenue. Capped at S$5,000, the grant requires companies to have made Central Provident Fund contributions in the 2011 assessment year.
Some minor changes to goods and services tax (GST), relating to marine related supplies, the biomedical industry and a new scheme for certain specialised warehouses were also announced.
Changes were also proposed regarding stamp duty relief, for example, to remove many fixed and nominal stamp duties, and to extend stamp duties remission for project finance.
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