This GMS Flash Alert reports that Singapore’s recently-announced budget contains proposals to enhance the personal tax system’s progressivity and to phase out the tax concession of employer-provided home leave travel for expatriate employees.
Singapore’s finance minister delivered the 2016 Budget Statement on 24 March 2016.1 The budget contained few proposals affecting individuals; however, there were proposals to enhance the personal tax system’s progressivity and to phase out the tax concession of employer-provided home leave travel for expatriate employees.
The cap on total reliefs that can be claimed by a taxpayer and the
removal of the 20-percent tax concession on employer-paid air passages to an expatriate’s home country will have the impact of raising the tax burden on
individuals subject to Singapore taxation who have heretofore benefitted from
the existing rules. Limiting the total relief that can be claimed and subjecting the provision of home leave by employers to full income taxation could raise international assignment costs for employers with assignees working in Singapore.
To enhance the progressivity of the personal tax system, the total amount of personal income tax reliefs that a resident individual can claim will be capped at S$80,000 per year of assessment (YA).
The change will take effect from YA 2018.
An expatriate employee (i.e., non-citizen or non-permanent resident of Singapore) is only taxed on 20 percent of the cost of employer-provided air passages to his or her home country, limited to one passage each per year for the employee and spouse, and two passages per year for each qualifying child.
This concession will be withdrawn from YA 2018.
1 For the budget speech and related
documentation, see: http://www.singaporebudget.gov.sg.
For a complete analysis of the Budget, see “Singapore Budget 2016: Partnering for the Future,” a publication of the KPMG International member firm in Singapore.
For further information or assistance, please contact your local GMS or People Services professional or one of the following professionals with the KPMG International member firm in Singapore:
BJ Ooi, Partner, Head of GMS
Tel. +65 6213 2657
Dennis McEvoy, Partner
Tel. +65 6213 2645
The information contained in this newsletter was submitted by the KPMG International member firm in Singapore.
© 2016 KPMG Services Pte Ltd (Registration No. 200003956G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International cooperative, KPMG International. All rights reserved.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.