Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivered the Budget Speech for the Financial Year 2014 Budget on 21 February 2014.
This year's Budget continues to push for quality growth based on innovation and deeper capabilities, while building an inclusive society.
Enhancing productivity and encouraging innovation is at the core of the various tax changes announced for businesses operating in Singapore, which include:
- extension of the Productivity & Innovation Credit ("PIC") Scheme till the Year of Assessment ("YA") 2018 and enhancements of existing PIC Scheme conditions to give businesses more time, certainty and flexibility to put in place productivity improvements
- introduction of the PIC+ Scheme to provide support to Small and Medium Enterprises ("SMEs") who are making substantial investments to transform their business
- extension of the Research and Development ("R&D")
tax incentives which were due to expire in the year 2015:
- extension of the enhanced tax deduction for R&D expenditure till YA 2025
- extension of further tax deduction on expenditure incurred in relation to R&D projects approved by Economic Development Board ("EDB") till 31 March 2020
The above tax deductions are available to businesses even for R&D expenditure in areas unrelated to the existing trade or business as long as the R&D is conducted in Singapore.
- extension of the Writing Down Allowance ("WDA") Scheme on Intellectual Property Rights till YA 2020
- extension of the tax deduction scheme for Registration Costs of Intellectual Property till YA 2020
To further promote economic growth, targeted tax measures were also introduced to ease tax compliance for businesses and to boost the financial services sector:
- waiver of withholding tax on payments to Singapore branches in respect of interest, technical fees, managements fees and royalties made on or after 21 February 2014
- stamp duty rates for land premiums, property purchase, and share transfers will be computed by using a percentage of the purchase price or market value, which simplifies the computation.
- concession for recovery of Goods and Services Tax ("GST") for Qualifying Funds will be extended till 31 March 2019
- extension and refinement of the various tax incentive schemes for Qualifying Funds
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