Singapore Budget 2022 Highlights
- Increase in the top marginal personal income tax rate for resident individual tax payers;
- GST increase will be delayed to 2023;
- Increase in property tax rate for residential properties starting from 2023;
- Possibility of introduction of Minimum Effective Tax Rate (METR) in future years;
Key Tax Changes
1. Enhance the progressivity of Personal Income Tax (“PIT”) of tax- resident individual taxpayers
2. Extension the withholding tax (WHT) exemption for non-tax resident mediators
From 1 April 2023 to 31 Dec 2027, gross income derived by non-tax- resident mediators from mediation work carried out in Singapore will be subject to a concessionary WHT tax rate of 10%, subject to conditions or alternatively, non resident mediators may elect to be taxed at 24% on the net income, instead of 10% on gross income.
3. Extension the WHT tax exemption for non-tax resident arbitrators
Goods and Service Tax (“GST”)
1. Increase the GST rate
a) from 7% to 8% with effect from 1 January 2023; and
b) from 8% to 9% with effect from 1 January 2024.
2. GST treatment for travel arranging services
a) If the customer of the service belongs in Singapore, the travel arranging service will be standard- rated; or
b) If the customer of the service belongs outside Singapore and the direct beneficiary either belongs outside Singapore or is GST-registered in Singapore, the travel arranging service will be zero-rated.
1. Enhance the progressivity of property tax for owner-occupied residential properties
2. Enhance the progressivity of property tax for non-owner occupied residential properties
1. Introduction of the Minimum Effective Tax Rate (“METR”) Regime
2. Extension and enhance the Approved Royalties Incentive (“ARI”)
3. Extend the Approved Foreign Loan (“AFL”) scheme
4. Extend the Tax Framework for Facilitating Corporate Amalgamations under Section 34C of the ITA to Licensed Insurer
The extension of the framework is subject to conditions, which include the following:
- The amalgamated company takes over all property, rights, privileges, liabilities, and obligations, etc. of the amalgamating company on the date of amalgamation; and
- The amalgamating company becomes dormant (i.e. ceases to conduct any business or any other activities, and does not derive any income) on the date of amalgamation and remains so until it is dissolved or wound up; and
5. The Integrated Investment Allowance (“IIA”) scheme will be allowed to lapse after 31 December 2022.