Newsflash - Budget 2025 Tax Changes

Prime Minister Lawrence Wong has just released a comprehensive Budget Statement for 2025 on 18 February 2025. We have extracted the tax-specific elements of the Statement. If you require further information, do feel free to contact our Head of Tax, Bun Hiong, at bunhiong@pkf.com

Personal Income Tax Rebate: 60% personal income tax rebate for the Year of Assessment 2025, capped at $200.

Corporate Tax Rebate: 50% corporate tax rebate for the Year of Assessment 2025 with a minimum benefit of a $2,000 cash grant.  The total benefits will be capped at $40,000.

Double Tax Deduction for Internationalisation: This will be extended til 31 December 2030.

Mergers and Acquisitions Scheme: This will be extended til 31 December 2030.

Safe-harbour for disposal gains (Section 13W): To provide certainty to companies, the sunset date will be removed and this will now be a permanent feature of the Act from 1 January 2026.  Qualifying gains will now also include gains from disposal of preference shares accounted for as equity by the investee. The shareholding threshold will now also be assessed on a group basis.

Tax Deduction for Employee Equity Based Remuneration Scheme (EEBR): This will now be expanded to include remuneration from the issuance of new shares. This will take effect from the Year of Assessment 2026.

Land Intensification Allowance Scheme (LIA): This will be extended to 31 December 2030.  The related company threshold will also be lowered from 75% to 50% for applications made from 1 January 2026.

Qualifying Project Debt Securities Scheme: This will lapse after 31 December 2025.

Insurance Business Development Scheme: This will be extended until 31 December 2030.  In addition, an additional tier of 15% will be introduced.

Financial Sector Incentive Scheme: An additional tier of 15% will be introduced.

New Listing Incentives: A Corporate Income Tax Rebate for the listing entity will be introduced.  In addition, a corporate tax rate of 5% will be introduced for new fund manager listings in Singapore as well as a tax exemption on fund managers’ qualifying income that arise from funds substantially investing in Singapore-listed equities.

S-REITs: Tax concessions will be extended until 31 December 2030.  In addition, specified income will be expanded to include co-location and co-working income.  This will take effect from 1 July 2025.

REIT ETF/S-REIT ETF: This will be extended until 31 December 2030.

GST remission for S-REITs and Singapore-listed Registered Business Trusts: This will be extended until 31 December 2030 for S-REITS and RBTs in the infrastructure business, ship leasing and aircraft leasing sectors.

Venture Capital Fund/ Venture Capital Fund Management Incentives: These will be extended until 31 December 2030.

Approved Shipping Financing Arrangement Award: This Award for Ships and Containers will be introduced to provide relief from Withholding taxes on qualifying payments.

Maritime Sector Incentives: These will be extended until 31 December 2031.

Withholding Tax Exemptions for container lease payments: These will be extended until 31 December 2031.

Withholding Tax Exemption on payments to non-resident arbitrators/mediators: This will lapse after 31 December 2027.

Reach out to our Head of Tax, Bun Hiong, at bunhiong@pkf.com