The Singapore Parliament has passed the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Bill 2024, which introduces changes to the Development and Expansion Incentive (DEI) programme.

The Economic Expansion Incentives (Relief from Income Tax) Act, first introduced in 1967 and amended multiple times since, is designed to encourage companies to enhance their capabilities and undertake new or expanded activities in Singapore.

New tax rate

A new concessionary tax rate of 15% has been introduced for qualifying income derived on or after 1 January 2024. This rate is in addition to the existing concessionary rates of 5% and 10%. Companies awarded the Development and Expansion Incentive (DEI) can benefit from this new rate starting from 17 February 2024.

Extension of tax relief periods

The bill allows for extensions of tax relief periods for relevant DEI recipients up to 31 December 2028. This extension provides companies with a longer timeframe to benefit from the incentives offered under the DEI programme.

Expanded scope

The definition of a “relevant development and expansion company” has been broadened. This expansion in scope is likely to allow more companies to qualify for the DEI, potentially increasing the number of businesses that can benefit from these tax incentives.

Additional amendments

The bill also includes amendments to sections 41 and 43 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967, which relate to investment allowances. While specific details of these amendments are not provided, they are likely aimed at further enhancing the attractiveness of Singapore’s tax incentive schemes for businesses.