Are you ready for the April 2025 tax filing season? If not, you might miss out on valuable benefits from the Singapore Budget 2025, announced on February 18, 2025.
This budget includes tax rebates and incentives designed to support individuals and businesses. .Let's explore how to maximise these opportunities for your tax filing in April 2025.
The Singapore Budget 2025 introduces various tax policy changes that affect companies and individuals. Below is a breakdown of key changes, their implications, and whether they present benefits or disadvantages.
| Incentive | Details | Impact | Attention |
|---|---|---|---|
| 50% Corporate Income Tax (CIT) Rebate for YA 2025 + Cash Grant | 50% rebate on tax payable, min SGD 2,000 cash grant, capped at SGD 40,000 for active companies with one local employee in 2024 | Benefits smaller companies; larger firms may find the cap limiting. | Maintain local employment records to ensure eligibility. |
| Extension of Double Tax Deduction for Internationalisation (DTDi) till 31 Dec 2030 | 200% deduction on qualifying international expansion expenses. | Reduces taxable income for companies expanding overseas. | Plan expansions to leverage this scheme; await EnterpriseSG details (2Q 2025). |
| Extension of M&A Scheme till 31 Dec 2030 | Tax allowances and 200% deductions on qualifying M&A costs. | Encourages growth via acquisitions for strategic consolidation. | Assess M&A opportunities to maximise tax benefits. |
| Enhanced Section 13W | Sunset date removed; expanded to preference shares, group-based assessment from 1 Jan 2026. | Provides certainty and flexibility for investment exits. | Review investment portfolios for tax planning (IRAS details by 3Q 2025). |
| Tax Deduction for Employee Equity-Based Remuneration (EEBR) Payments | Deduction for payments to holding companies/Special Purpose Vehicles (SPVs) for new shares under EEBR from YA 2026. | Reduces costs of equity compensation for talent-driven firms. | Evaluate EEBR adoption (IRAS details by 3Q 2025). |
| Tax Deduction for Cost Sharing Agreements (CSAs) | 100% deduction for innovation activity payments from 19 Feb 2025. | Supports collaborative R&D in tech and innovation sectors. | Seek CSA approval (EDB details by 2Q 2025). |
| Extended and Intensification Allowance (LIA) | Extended to 31 Dec 2030; shareholding threshold lowered to >50% from 1 Jan 2026. | Encourages efficient land use for property-intensive firms. | Check eligibility: Building and Construction Authority (BCA) or Economic Development Board (EDB) details by 3Q 2025). |
| Sector-Specific Incentives | - Insurance Business Development( IBD): Extended to 31 Dec 2030, new 15% Corporate Tax Rate (CTR) tier from 19 Feb 2025. - Financial Sector Incentives (FSI): New 15% CTR tier from 19 Feb 2025. - Equities Market: CIT rebate, 5% CTR for fund managers, tax exemptions for equity funds. - S-REITs/RBTs: Tax concessions extended to 31 Dec 2030. - Maritime (Approved Ship Finance Arrangement (ASFA) or Maritime Sector Incentive (MSI): Withholding tax exemptions and extensions to 31 Dec 2031. |
Strengthens insurance hub, enhances competitiveness for financial firms, boosts listings and investments, supports REIT growth, aids shipping and leasing sectors. | Align strategies with these incentives (details from MAS, Maritime and Port Authority of Singapore (MPA), and IRAS by 2Q 2025). |
| Lapsing Incentives | - Venture Capital : Venture Capital Fund Incentive (VCFI) or Fund Management Incentive (FMI): Lapse after 31 Dec 2025. - Qualifying Person Development Scheme ( QPDS)Scheme): Lapse after 31 Dec 2025. |
Disadvantages VC firms and project finance entities; alternative support promised. | Adjust financing/investment plans accordingly. |
| Category | Details | Impact | Attention |
|---|---|---|---|
| Personal Income Tax (PIT) Rebate for YA 2025 | 60% rebate, capped at SGD 200 per taxpayer; part of SG60 package. | One-time relief, benefiting all tax residents, but limited by cap. | Factor into 2025 tax planning. |
| Exclusion of MediSave Minimum Sum Scheme (MMSS) Cash Top-Ups from CPF Cash Top-Up Relief | Top-ups attracting MMSS grants from 1 Jan 2026 excluded from relief in YA 2027. | Disadvantages individuals seeking dual benefits (grant + relief); ensures fairness with MRSS. | Plan top-ups to maximise relief (up to SGD 16,000/year for non-MMSS top-ups). |
| Additional Flat Component (AFC) for Electric Heavy Goods Vehicles (HGVs) and Buses | New road tax effective 1 Jan 2026, with phased increases until 2028; waived until 2029 for pre-2026 registrations. | Increases costs for electric HGV/bus owners, leveling taxation with Internal Combustion Vehicles (ICE) vehicles. | Budget for higher road tax if registering post-2025. |
Under the Singapore Budget 2025, businesses file Corporate Income Tax (CIT) returns online via the IRAS myTax Portal. Here’s the essentials:
Note: Dormant companies file unless waived by IRAS.
To ensure compliance and avoid penalties:
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