This GMS Flash Alert reports on a measure in the recent Singapore budget that provides for a one-off personal income tax rebate of 20 percent of tax payable which is capped.
In his 2017 Budget Statement1 delivered on 20 February 2017, the Finance Minister for Singapore announced that a personal income tax rebate of 20 percent of tax payable, capped at S$500, will be granted to all resident individuals for the Year of Assessment (“YA”) 2017 (i.e., for income earned in the year 2016).
For a complete analysis of the Budget, see “Singapore Budget 2017 Moving Forward Together,” (PDF 1.14 MB) a publication of the KPMG International member firm in Singapore.
Non-Singapore citizens who have ceased Singapore employment, and who are eligible for the 20-percent rebate, should make sure the Inland Revenue Authority of Singapore (“IRAS”) has a current mailing address on file in order to receive the amended Notice of Assessment (“NOA”) and refund cheque. Otherwise, the IRAS will send the amended NOA and refund cheque to the individual’s last known address.
Where a tax equalization policy is applied, employers will have to take certain steps if they are requesting a refund on behalf of their employees eligible for the 20-percent rebate.
Based on the progressive tax rates, resident taxpayers will receive the maximum rebate of S$500 if their chargeable income is at least S$67,858.
Where an employer is responsible for the foreign employee’s Singapore tax under a corporate tax equalization policy, the employer will have to provide required documents (e.g., an authorisation letter from the employee) to IRAS to request the refund cheque to be issued in the name of the employer. Otherwise, the employer would need to recover the funds from the tax refund directly from the employee.
Employers should clearly communicate to affected employees, in general terms, the steps being taken and why the refund is being appropriated by the employer (if such is the case).
1 See the Singapore Ministry of Finance website for the budget speech and related documentation.
The information contained in this newsletter was submitted by the KPMG International member firm in Singapore.
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