Singapore’s Prime Minister and Finance Minister, Lawrence Wong, presented the 2025 budget on 18 February 2025 outlining various tax changes which include corporate income tax (CIT) rebate and incentives to drive investments.

The key tax measures are as follows:

Corporate income tax (CIT) rebate 

A 50% corporate income tax (CIT) rebate will be given in the year of assessment (YA) 2025, with a minimum benefit of SGD 2,000 for companies meeting the local employee condition in the calendar year 2024.

Double tax deduction for internationalisation (DTDi) scheme extension

The Double Tax Deduction for Internationalisation (DTDi) scheme, which offers a 200% tax deduction on qualifying market expansion and investment expenses, has been extended until 31 December 2030.

Mergers and acquisitions (M&A) scheme extension

The mergers and acquisitions (M&A) scheme, which allows Singapore companies to claim tax benefits for qualifying acquisitions, has been extended until 31 December 2030.

Enhancement of Section 13W of the Income Tax Act 

Section 13W of the Income Tax Act, which offers tax certainty for disposal gains under specific conditions, will be enhanced from 1 January 2026. Changes include expanding eligible capital gains to cover sales of preference shares classified as equity by the investee company and allowing the shareholding threshold condition to be assessed on a group basis. Additionally, the sunset date for this provision will be abolished.

Company tax deduction claims

Companies can claim a tax deduction on payments to a holding company or special purpose vehicle (SPV) for issuing new shares under Employee Equity-Based Remuneration (EEBR) from YA 2026.

Tax deductions for payments under CSA

Starting 19 February 2025, companies can claim a 100% tax deduction for payments under an approved Cost-Sharing Agreement (CSA) for innovation activities, even if they don’t qualify as “research and development” under ITA.

Project and infrastructure tax incentives 

  • Tax incentives for project and infrastructure finance will be adjusted.
  • The Qualifying Project Debt Securities (QPDS) scheme will end after 31 December 2025.
  • The exemption for qualifying foreign-sourced income from offshore infrastructure projects received by listed entities will be extended to 31 December 2030.

Insurance business development (IBD) and IBD-captive insurance (IBD-CI) schemes

  • The Insurance Business Development (IBD) and IBD-Captive Insurance (IBD-CI) schemes are extended until 31 December 2030.
  • The IBD, IBD-CI, and IBD-Insurance Broking Business (IBD-IBB) schemes will be subject to a new 15% concessionary tax rate starting 19 February 2025.

FSI-standard tier, FSI-trustee company, and FSI-headquarter services schemes 

Starting on 19 February 2025, a 15% CTR tier will be implemented for the FSI-Standard Tier, FSI-Trustee Company, and FSI-Headquarter Services schemes.

Income tax concessions for S-REIT ETFs

Income tax concessions for S-REIT Exchange-Traded Funds (ETFs) traded on the Singapore Exchange will be extended. This includes removing:

  • The sunset date for tax transparency on distributions received by S-REIT ETFs from S-REITs;
  • Extending the 10% withholding tax rate for distributions received by qualifying non-tax-resident non-individuals and funds until 31 December 2030.

New tax incentives to drive investments in Singapore-listed equities

Several tax incentives will be introduced to boost new listings and investment in Singapore-listed equities, including a CIT rebate for new corporate listings, an enhanced 5% concessionary tax rate (CTR) for new fund manager listings, and a tax exemption on qualifying income for fund managers investing in Singapore-listed equities.

GST remission for S-REIT

The GST remission for S-REITs and Registered Business Trusts (RBTs) has been extended until 31 December 2030.

Venture capital fund incentive (VCFI) and the fund management incentive (FMI)

The Venture Capital Fund Incentive (VCFI) and the Fund Management Incentive (FMI) are set to expire on 31 December 2025.

Tax concessions for real estate investment trusts (S-REITs) extension

Tax concessions for Singapore-listed Real Estate Investment Trusts (S-REITs) are extended until 31 December 2030.

Approved Shipping Financing Arrangement (ASFA) Award

An Approved Shipping Financing Arrangement (ASFA) Award will provide a withholding tax (WHT) exemption on interest and related payments to non-resident lenders for qualifying arrangements made by 31 December 2031 to finance ship and container purchases or construction, which will go into effect on 19 February 2025.

Maritime sector incentive (MSI) 

The Maritime Sector Incentive (MSI) will be extended until 31 December 2031, with enhancements from 19 February 2025.

WHT exemption for container lease payments 

  • The WHT exemption for container lease payments to non-tax-resident lessors under operating lease agreements will be extended to those signed by 31 December 2031.
  • The WHT exemption for ship and container lease payments to non-resident lessors under finance lease agreements will apply to agreements made by 31 December 2031.

Personal income tax rebate

For YA 2025, all tax-resident individuals will receive a 60% personal income tax (PIT) rebate, capped at SGD 200 per taxpayer.