Singapore’s budget for 2016 reflects initiatives of the new Finance Minister and the government’s desire to balance both social and business needs. This year’s budget focuses in part on small and medium sized enterprises (SMEs), and pledges support for SMEs that are venturing into innovation and exploring foreign markets, by affording easier access to government grants and support. The focus is outside of large multinational companies, yet the approach is sector-focused, with calibrated measures that address the unique needs and challenges faced by Singapore’s SMEs.
Among the tax provisions in the budget 2016 are measures for an increase in amount of the corporate tax rebate that largely benefits SMEs that are actually paying tax (start-ups making losses will not be able to enjoy the benefits). Other tax measures provide for an extension of the non-taxation of gain from equity investment, and provide a certain degree of flexibility to claim writing-down allowances on the acquisition cost of intellectual property (IP) over a longer period of time, thereby helping companies to take full advantage of foreign tax credits on foreign royalty income arising out of IPs.
Read a March 2016 report [PDF 5.9 MB] prepared by the KPMG member firm in Singapore: Budget 2016
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