Singapore Budget 2024 Tax Changes

What Are the Key Singapore Budget 2024 Tax Changes?

The main Singapore Budget 2024 tax changes for businesses include:

A 50% Corporate Income Tax (CIT) Rebate for YA 2024.
A CIT Rebate Cash Grant for qualifying companies.
Enhanced tax deductions under the Enterprise Innovation Scheme.
Changes to Renovation or Refurbishment (R&R) tax deductions.
The introduction of the Refundable Investment Credit (RIC).
The implementation of Pillar Two international tax measures for qualifying multinational groups.

Each measure has a different purpose. Therefore, businesses should consider which changes are relevant to their activities, size, and investment plans.

1. Corporate Income Tax Rebate for YA 2024

One of the most significant measures was the 50% CIT Rebate for YA 2024. The rebate was introduced to help companies manage rising business costs.

Eligible companies can receive a CIT Rebate of 50% of their tax payable for YA 2024, subject to the applicable cap. Companies that met the local employee condition could also receive a minimum S$2,000 benefit through the CIT Rebate Cash Grant. The total benefit from the CIT Rebate and cash grant was capped at S$40,000.

This measure can provide useful cash-flow support for businesses that incurred corporate tax for YA 2024.

Who Could Benefit From the CIT Rebate?

The CIT Rebate was particularly relevant to companies with taxable profits and qualifying local employment. A company was generally considered to meet the local employee condition if it made CPF contributions to at least one local employee in 2023, subject to the applicable rules. Shareholders who were also directors were excluded from this condition.

Businesses should therefore review their YA 2024 tax assessment and applicable eligibility conditions when assessing the benefit.

2. Enhanced Enterprise Innovation Scheme

Another important Budget 2024 measure relates to innovation and business development.

The Enterprise Innovation Scheme (EIS) provides enhanced tax deductions and allowances for qualifying activities from YA 2024 to YA 2028. These activities include qualifying R&D conducted in Singapore, intellectual property registration, acquisition and licensing of intellectual property rights, training, and qualifying innovation projects.

For certain qualifying activities, businesses can receive enhanced deductions of up to 400% on qualifying expenditure within the applicable limits.

R&D Tax Benefits

Businesses conducting qualifying R&D in Singapore can benefit from enhanced deductions. For YA 2024 to YA 2028, qualifying R&D expenditure can receive a base 100% deduction plus additional deductions on qualifying expenditure, subject to the relevant rules and expenditure limits.

This can make Singapore more attractive for companies investing in technology, product development, and innovation.

Cash Payout Option

Eligible businesses may also choose to convert up to S$100,000 of qualifying expenditure across the EIS activities into a cash payout at a 20% conversion rate. The non-taxable cash payout is capped at S$20,000 per YA from YA 2024 to YA 2028.

This option may be useful for innovative businesses that have limited taxable income and therefore cannot fully benefit from tax deductions.

3. Changes to Renovation and Refurbishment Deductions

Budget 2024 also introduced changes to the tax deduction rules for Renovation or Refurbishment (R&R) expenditure.

From YA 2025, the scope of qualifying expenditure was expanded to include certain designer and professional fees. In addition, Singapore introduced a fixed three-year period for determining the R&R expenditure cap, with the first period covering YA 2025 to YA 2027. Businesses can also choose to claim qualifying R&R deductions in one YA, subject to the applicable expenditure cap.

These changes may be relevant to businesses that renovate offices, retail premises, restaurants, or other commercial spaces.

4. Refundable Investment Credit

Budget 2024 introduced the Refundable Investment Credit (RIC) to strengthen Singapore’s position as an investment and business hub.

The RIC supports sizeable investments that create substantive economic activities in Singapore. Qualifying projects may include new productive capacity, digital services, professional services, supply chain management, headquarters activities, R&D, innovation, and decarbonisation projects.

Approved companies can receive RIC support of up to 50% of qualifying expenditure, depending on the project and applicable conditions.

The credits can be used against certain corporate tax liabilities. In addition, unused credits may be refunded in cash within four years after the company satisfies the conditions for receiving the credits.

Why Is the RIC Important?

The RIC is particularly relevant to businesses planning substantial investments in Singapore.

For example, a company considering a new manufacturing facility, regional headquarters, technology operation, or major R&D project may evaluate whether its investment could qualify for the scheme.

However, the RIC is not an automatic tax deduction. Companies must obtain approval from the relevant authorities, including the Economic Development Board (EDB) or Enterprise Singapore, depending on the scheme requirements.

5. New International Tax Rules for Large Multinational Groups

Singapore Budget 2024 also introduced important international tax measures under the OECD’s BEPS 2.0 framework.

Singapore implemented the Income Inclusion Rule and Domestic Top-up Tax for financial years beginning on or after 1 January 2025. These measures aim to ensure that qualifying multinational enterprise groups are subject to a minimum effective tax rate of 15%.

The rules generally apply to multinational groups with annual consolidated revenue of at least €750 million in at least two of the four preceding financial years, subject to the relevant conditions.

What Does This Mean for Singapore Businesses?

Most small and medium-sized businesses will not fall within the scope of these Pillar Two rules.

However, large Singapore-headquartered groups and Singapore entities that belong to qualifying multinational groups may need to review their group structure, tax calculations, reporting obligations, and data requirements.

Therefore, affected businesses should assess the rules early and obtain professional tax advice where necessary.

How Can Businesses Prepare for These Tax Changes?

Understanding the rules is only the first step. Businesses should also consider how the measures affect their financial planning.

Review Your Corporate Tax Position

Companies should review their taxable income, tax deductions, capital expenditure, and available tax incentives. This can help identify opportunities to improve tax efficiency while maintaining proper compliance.

Review Innovation and R&D Spending

Businesses investing in technology, product development, training, or intellectual property should determine whether their expenditure qualifies under the EIS.

Keeping detailed records of qualifying costs is particularly important because enhanced deductions depend on specific eligibility requirements.

Plan Major Investments Carefully

Companies considering significant investments in Singapore should evaluate whether the RIC or other investment incentives may apply.

Early planning is important because some incentives require approval before or during the investment process.

Strengthen Accounting Records

Accurate accounting records help businesses support their tax claims and respond to IRAS requirements.

Companies should maintain appropriate documentation for expenses, R&D projects, employee costs, intellectual property, and investment activities.

Why Singapore’s Budget 2024 Tax Changes Matter to Businesses

The tax measures announced in Budget 2024 were designed to support businesses while encouraging innovation, investment, and economic growth.

For smaller companies, the CIT Rebate and EIS may provide useful tax or cash-flow benefits. Meanwhile, businesses undertaking major investment projects may find the RIC particularly relevant.

Large multinational groups face a different consideration because Pillar Two introduces additional international tax requirements.

As a result, businesses should not view the Singapore Budget 2024 tax changes as a single tax measure. Instead, companies should assess each measure based on their business model, investment plans, tax position, and future growth strategy.

Frequently Asked Questions About Singapore Budget 2024 Tax Changes

What was the main corporate tax change in Singapore Budget 2024?

The main corporate tax support measure was a 50% CIT Rebate for YA 2024, subject to a maximum total benefit of S$40,000 when combined with the applicable CIT Rebate Cash Grant.

What is the Enterprise Innovation Scheme?

The Enterprise Innovation Scheme provides enhanced tax deductions and allowances for qualifying R&D, intellectual property, training, and innovation activities from YA 2024 to YA 2028.

What is the Refundable Investment Credit?

The Refundable Investment Credit is an investment incentive introduced in Budget 2024. It can support qualifying investments that create substantive economic activities in Singapore, with support of up to 50% of qualifying expenditure depending on the approved project.

Do all Singapore businesses have to follow Pillar Two rules?

No. Pillar Two generally applies to qualifying multinational enterprise groups that meet the €750 million consolidated revenue threshold and other conditions. Smaller domestic businesses are generally outside its scope.

Can businesses claim enhanced tax deductions for R&D?

Yes, qualifying businesses may claim enhanced deductions for eligible R&D expenditure under the applicable EIS and R&D tax rules for YA 2024 to YA 2028. Specific conditions and expenditure limits apply.

Conclusion

The Singapore Budget 2024 tax changes introduced several measures that can affect corporate tax planning, innovation, investment, and international tax compliance.

Businesses can benefit from reviewing the CIT Rebate, Enterprise Innovation Scheme, R&R deduction changes, and Refundable Investment Credit where applicable. At the same time, large multinational groups should assess their responsibilities under the new Pillar Two framework.

Ultimately, effective tax planning requires more than knowing the headline changes. Businesses should review their financial activities, maintain accurate records, and determine which incentives and obligations apply to their specific circumstances. Professional tax advice can also help companies make informed decisions and manage Singapore’s evolving tax requirements.