On 16 November 2021, the Income Tax (Amendment) Act 2021 came into force. The Act gives effect to 2021 Budget and non-Budget tax measures, including an extension of the enhanced loss carry-back relief scheme, enhanced deduction for donations and withholding tax exemption for certain payments. The law provides for the following tax measures:
Loss carry-back relief scheme
In order to support companies with their cash flow, the enhancement to the loss carry-back relief scheme has been extended for another year. Qualifying deductions for the Year of Assessment (“YA”) 2021 may be carried back up to three preceding YAs instead of one. The amount of qualifying deductions that can be carried back is limited to S $ 100,000. This allows businesses to get a refund of up to SGD 17,000 of income tax paid for 2018 through 2020.
Double Tax Deduction for Internationalization scheme
To encourage companies to internationalize, the scope of the Double Tax Deduction for Internationalization (DTDi) program has been expanded to cover additional qualifying expenses, such as specific expenses for attending approved virtual trade fairs.
Monetary support payments received from landlords
Mandatory or voluntary monetary support payments that tenants receive from their landlords in 2021 will not be taxed. This will allow tenants to benefit from the full amount of the monetary support payments. Landlords will be allowed to claim income tax deductions for the monetary support payments they made to tenants in 2021.
