Budget 2014 in Singapore – Details and Summary of Useful Taxation Changes
For Individuals
1) Enhancement of the Parent and Handicapped Parent Reliefs
| Type of Reliefs | Those staying with dependants | Those NOT staying with dependants |
|---|---|---|
| Parents Relief | $9,000 | $5,500 |
| Handicapped Parents Relief | $14,000 | $10,000 |
This will take effect from Year of Assessment (YA) 2015.
2) Enhancement of the Handicapped Spouse, Handicapped Sibling and Handicapped Child Reliefs
- Handicapped Spouse Relief increased from $3,500 to $5,500
- Handicapped Brother/Sister Relief to rise from $3,500 to $5,500
- Handicapped Child Relief to increase from $5,500 to $7,500
The above will only take effect from Year of Assessment (YA) 2015.
3) Removing the Transfers of Qualifying Deductions and Deficits between Spouses
With effect from YA 2016, married couples will no longer be able to transfer qualifying deductions and deficits to each other (including under the loss carry-back scheme).
IRAS will be providing more details by the end of May 2014.
4) Removal of Section 40 Relief
From YA 2016, the Section 40 Relief will be removed.
For All Businesses
1) Extension of the Productivity and Innovation Credit (PIC) Scheme
The PIC scheme will be extended for another 3 years till YA 2018.
In relation to the enhanced tax deductions, the expenditure cap of $400,000 per qualifying activity per YA can be combined across YA 2016 to YA 2018 (i.e. $1.2 million per qualifying activity).
As per current situation, regarding the PIC cash payout, the expenditure cap of $100,000 per YA for all six qualifying activities cannot be combined across the three YAs.
2) PIC+ Scheme
Under the PIC+ scheme, the expenditure cap for qualifying SMEs will be increased from $400,000 to $600,000 per YA per qualifying activity.
PIC+ will take effect for expenditure incurred from YA 2015 to YA2018. The combined expenditure cap will be up to $1.4 million for YA 2015, and up to $1.8 million for YA 2016 to YA 2018.
The expenditure cap for PIC cash payout will stay the same at $100,000 of qualifying expenditure per YA.
IRAS will be releasing further information by end March 2014.
3) Extending the PIC benefits to training of individuals under centralised hiring arrangements
From YA 2014, the PIC scheme will be enhanced to allow businesses to claim PIC benefits on training expenses incurred in relation to individuals hired under centralised hiring arrangements.
IRAS will release further details by the end of March 2014.
4) The three-local-employees condition for PIC cash payout to be refined
From YA 2016, businesses applying for PIC cash payout will have to meet the three-local-employees condition for a consecutive period of at least three months before claiming the cash payout.
J Accounting Services had put together a summary of useful information for you regarding the latest tax changes that were introduced in Singapore Budget 2014. These are the key change that will affect the individuals as well as your business. If you need help on PIC claims with IRAS, you will be glad to know that J Accounting Services do offer you with PIC government grant assistance services.
