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Updates on Rental Relief Framework

Expanded powers for rental relief assessors

Under the rental relief framework, a landlord who is unable to reach an agreement with is tenant may apply to have an independent rental relief ascertain:

a) The tenant’s eligibility for rental waivers (either the portion supported by Government assistance, and/or the portion borne by the landlord)

b) The landlord’s eligibility to provide a reduced amount of rental waivers, on the basis of financial hardship

The amendments to the Act proposed on September 3, will expand the powers of rental relief assessors so that they can make determinations on unresolved disputes relating to the amount of rent to be waived under the framework, where the amount is affected by any of the following factors:

a) The amount of maintenance and service charges, especially where such charges are not explicitly listed in the lease or license agreement

b) The amount that can be offset by assistance provided by the landlord earlier

c) The tenant is occupying the property for only a part of the relief period

d) There are multiple-sub tenants in the same property 

Clarifying interaction between Part 8 and other dispute resolution proceedings

The amendment Bill will also clarify the existing Part 8 of the Act – not yet in force – that allows parties of some contracts to get relief if they are affected by breaches or delays in construction, supply or related contracts.

It will specify that no application for relief for such contracts can be filed if court, arbitral or Building and Construction Industry Security of Payment Act (Sopa) proceedings related to the application have already started.

Conversely, once an application for relief ha been filed, the other parties of the contract cannot commence, arbitral or Sopa proceedings or the same matter, until a determination is made or the application is rejected or withdraw. 

If a determination is made and the terms of the contract are adjusted, any subsequent applications and determinations made under Sopa must be based on the adjusted contract terms. 

In cases where a Sopa application is made before the other party seeks relief under the Act, the Sopa adjudicator will have powers to grant relief – similar to that of the assessors – to account for the impact of Covid-19.

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FAQs on Rental Relief and Property Tax Rebate for SMEs

Rental Relief

The rental relief framework, comprising the Rental Relief and the Additional Rental Relief, applies to eligible tenant-occupiers of prescribed properties in qualifying leases or licences that are in writing, or evidenced in writing, which are:

a) (i) Entered into before 25 March 2020; or (ii) entered into before 25 March 2020 but expired and renewed either automatically or in exercise of a right of renewal in the contract; and

b) In force at any time between 1 April and 31 July 2020 for qualifying commercial properties, and between 1 April and 31 May 2020 for other non-residential (e.g. industrial/office) properties.

Rental Relief

Tenant-occupiers must fall in the following category to be eligible for Rental Relief:

a) Small and Medium Enterprises (SMEs) with not more than S$100 million in annual revenue for the Financial Year 2018 or a later appropriate period where applicable, at the individual or entity level

  • If the tenant-occupier has not carried on business for 12 months or longer as at the last day of its financial year ending on a date in the year 2018, but has carried on business for 12 months or longer as at last day of its financial year ending on a date in the year 2019, the reference period will be FY2019 instead. Id the foregoing does not apply, but the tenant-occupier has carried on business for 12 months or longer as at the last day of its financial year ending on a date in the year 2020, where the date is on or before March 2020, the reference period will be FY 2020. For any other case, the tenant-occupier’s average monthly revenue from the time the tenant-occupier commenced business until 31 March 2020 (both dates inclusive) will be extrapolated for comparison against the $100 million annual revenue threshold.

Additional Rental Relief

The Additional Rental Relief will apply to tenant-occupiers who qualify for Rental Relief, have carried on business at the rented property before 25 March 2020 and meet the following additional criteria:

(a) The tenant-occupier is a company/entity incorporated in Singapore, and if it is a member of a Singapore group of entities during the period 1 Apr 2020 to 31 May 2020, the aggregate revenue for such a group is not more than S$100 million for the Financial Year 2018 or a later appropriate period where applicable; and

(b) The tenant-occupier suffered at least a 35% drop in average monthly gross income at the outlet level from 1 Apr to 31 May 2019, or alternative period if the tenant-occupier was not operational as of 1 Apr 2019.

Note: If the tenant-occupier commenced business after 1 Apr 2019, comparison will be against the period from the date of commencement of business to 24 Mar 2020 (both dates inclusive) to ascertain the decrease of 35% or more. 

a) Rental Relief for eligible SME tenants (supported by Government assistance):

Eligible tenant-occupiers in qualifying commercial properties and other non-residential properties will receive the rental relief through a waiver of rent from their landlords. Property owners will receive support through the: (a) Property Tax Rebate for Year 2020 announced in the Unity and Resilience Budgets; and (b) Government cash grant announced in the Fortitude Budget.

Eligible SMEs in qualifying commercial properties will receive up to 2 months’ waiver of their rent, and eligible SMEs in other non-residential properties (e.g. industrial and office properties) will receive up to 1 months’ waiver of their rent.

b) Additional Rental Relief for SME tenants (supported by landlords/ property owners):

Eligible SME tenant-occupiers who have seen a 35% or more drop in their average monthly gross income due to COVID-19 will receive up to an additional 2 months’ waiver of rent for qualifying commercial properties, and up to an additional 1 month’s waiver of rent for other non-residential properties (e.g. industrial and office properties).

For more details on the definitions of property in each category, please refer to this.

*The value of the rent to be waived is based on the contractual rent of the tenant, excluding any maintenance fee and charges for the provision of services such as cleaning and security.

An intermediary landlord will be required to provide a full waiver to their tenant according to the applicable rental relief period.

  • In such a case, the tenant-occupier should provide its unaudited balance-sheet, profit and loss statement and cash flow statement for the period from the date of commencement of the business (at the prescribed property or any other place) to 31 March 2020 (both dates inclusive), supported by a statutory declaration by the tenant or (if the tenant is an entity) a relevant officer of the tenant.
  • If however, the above is also not available, the tenant should provide a statutory declaration by the tenant or (if the tenant is an entity) a relevant officer of the tenant stating that the revenue of the tenant, calculated using the formula 12xA is not more than $100 million, where A is the average monthly revenue from the business for the period from the date of commencement of the tenant’s business to 31 March 2020 (both dates inclusive).
  • A statutory declaration made in Singapore must be in the form set out in the First Schedule of the Oaths and Declarations Act (Cap. 211) and be made before a Commissioner for Oaths.

The Act provides for a moratorium on enforcement actions against eligible tenant-occupiers for non-payment of rent. Among other things, landlords are prohibited from taking the following actions on the tenant-occupier or the tenant-occupier’s guarantor/surety in relation to the non-payment of rent:

a) Terminating the lease or licence agreement;

b) Exercising the landlord’s right of re-entry or forfeiture under the lease or licence agreement; and

c) Starting or continuing court or insolvency proceedings.

This moratorium does not apply to tenants that are not tenant-occupiers, i.e. they are not operating on the property. It also does not apply to tenant-occupiers that do not meet the criteria for the rental relief, i.e. they are not a SME as defined. The moratorium also does not suspend interest due under lease agreements or license agreement. The moratorium ends when IRAS issues the notice of cash grant to the property owner, or on 31 December 2020 if no such notice is received before then.

If a landlord and tenant-occupier are unable to reach a compromise, the property owner and/or any intermediary landlord(s) may make an application using the prescribed form here within 10 working days after receiving (a copy of) the notice of cash grant, to have a rental relief assessor ascertain whether the tenant-occupier is eligible for Rental Relief and/or Additional Rental Relief. Please refer to the section Application for Assessment for details.

Under the Act, the rent that is payable by eligible tenants to their landlord for the relevant period of rental waiver is statutorily waived once qualifying property owners with eligible tenant-occupiers receive the notice of the cash grant issued by IRAS. This means that as an eligible tenant-occupier you do not need to pay rent for those months.

 

In the case where tenants have already paid rent for those months for which rent is waived, tenants can apply the rental waivers towards the next most immediate months of rent. If there is insufficient time left in the lease, tenants can obtain a refund from the landlord.

 

In cases where landlords had earlier provided assistance to their tenants or reached an agreement to provide assistance to their tenants, in the form of monetary payments or reduction of payments due under the lease agreement, or landlords have passed on the benefit of any Property Tax Rebate for Year 2020 in respect of the property, these can be offset from the landlords’ rental waiver obligations.

The Property Tax Rebate for Year 2020 for non-residential properties and the Government cash grant are based on the Annual Value of the property. This may not be equivalent to the rental waiver to be provided by landlords, which is based on the contractual rent. Tenants will still have to pay for maintenance fee and charges for the provision of services such as cleaning and security. Nevertheless, the landlord is obliged to provide the rental waiver based on the contractual rental as defined, not based on grant by the Government. The Property Tax Rebate and Government cash grant are not intended to cover the full amount of rental waivers exactly.

The Government recognises that there are landlords who may face genuine financial hardship.Landlords who meet all the following criteria may apply to a rental relief assessor to reduce the amount of Additional Rental Relief they have to provide:

a) The applicant landlord must be an individual or a sole proprietor and is the owner of the prescribed property;

b) The aggregate of the annual value of all investment properties (including the prescribed property) owned (whether solely or jointly with another person and whether directly or through one or more investment holding companies) is not more than S$60,000 as at 13 April 2020; and

c) The rental income derived from the property in question in Year of Assessment 2019 constituted 75% or more of the landlord’s gross income.

If the landlord meets the grounds of financial hardship above, the rental relief assessor may halve the amount of Additional Rental Relief to be borne by the landlord, i.e. one month’s rental waiver for qualifying commercial properties, or half a month’s rental waiver for other non-residential properties (e.g. industrial and office properties). The remaining rent payable will be borne by the tenant.

Property Tax Rebate

*Property Tax Rebate is different from Rental Relief

Property TypeComponentTax Rebate
HotelHotel Rooms100%
Function Rooms100%
Shops, restaurants, gym, tenements such as space for vending machine, base station and tour desk100%
Offices that are not used in connection with the operation of the hotel such as serviced offices30%
Retail MallShops and restaurants100%
Offices30%
Office BuildingOffices30%
Shops and restaurants100%
In-house gym that are used exclusively by the occupants of the office building
30%

Owners of qualifying properties are required to unconditionally and fully pass on to their tenant(s) the rebate for the property tax account that is attributable to the rented property based on the period it was rented out, by either reducing or offsetting current or future rentals or  through a payment to their tenant(s), within the prescribed timeframe.

Failure to properly pass on the rebate, or to keep the records (e.g. information on the amount, manner and time of pass on) until 31 Dec 2023, without reasonable excuse, is an offence. Those guilty of such an offence shall be liable on conviction to a fine not exceeding $5,000.

The property owners are to continue to pass on the rebate to their tenants despite any outstanding objections lodged for the year 2020. 

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Ministerial Statement – Aug 2020

On 17 August, DPM Heng released a ministerial statement to continue to support jobs and create new ones and provide further support for sectors which are hit the hardest. The continued support will cost $8 billion.

Extension of Jobs Support Scheme ("JSS")

Extension of JSS

The JSS will be extended by up to seven months, covering wages paid up to March 2021. This will provide continued support for businesses and workers amidst the protracted economic downturn.

The table below shows an overview of the support level based on the projected recovery of the various sectors.

Notes:

1. Firms that are not allowed to resume on-site operations will receive Tier 1 JSS support for September 2020 to March 2021 wages or until such time that they are allowed to resume operations on-site, whichever is earlier.

2. Firms in the Built Environment sector will receive Tier 1 JSS support for June to October 2020 wages, and Tier 2 support for November 2020 to March 2021 wages.

Extended JSS Support

Under the extended JSS, sectors are supported at the following tiers for wages paid from September 2020 to March 2021:

a) Tier 1 sectors (e.g. Aviation, Aerospace, and Tourism) that are currently receiving 75% JSS support, will receive 50% JSS support

b) Tier 2 sectors (e.g. Food Services, Retail, Marine & Offshore, and Arts and Entertainment) that are currently receiving 50% JSS support, will receive 30% JSS support

c) Tier 3 sectors that are currently receiving 25% JSS support, will receive 10% JSS support

i. This is with the exception of selected Tier 3 sectors (i.e. Financial Services, Information and Communications Technology and Media, Biomedical Sciences, Precision Engineering, Electronics and Online Retail and Supermarkets), which will receive 10% JSS support for wages paid from September to December 2020. JSS support for these sectors will cease after December 2020.

d) Employers in the Built Environment sector that are currently receiving Tier 1 (75%) JSS support for wages paid June to August 2020, will continue to receive Tier 1 JSS support (at 50%) for wages paid in September and October 2020, and thereafter Tier 2 (30%) support for wages paid from November 2020 to March 2021.

e) Employers which are not allowed to resume on-site operations during phased re-opening will receive Tier 1 (50%) JSS support for wages paid from September 2020 to March 2021, or until such time when they are allowed to resume operations on-site, whichever is earlier. 

List of Sectors in JSS Support Tier – Tier 1

SectorSubsectorQualifying Criteria
Aviation and AerospaceAviationConsists of:
• Airlines
• Airport ground handlers
• Airport operators
Aerospace maintenance, repair, and overhaul (MRO) operatorsThey must:
• Derive more than two-thirds of their revenue from aerospace MRO; and
• Have one of the following accreditations or regulatory approvals: (i) Singapore Airworthiness Requirements Part 145 (SAR145) or SAR21 from the Civil Aviation Authority of Singapore (CAAS) (or equivalent from Federal Aviation Administration (FAA)/ European Union Aviation Safety Agency (EASA)); or (ii) National Aerospace and Defense Contractors Accreditation Program (Nadcap); and
• Be classified under SSIC 30302.
Aerospace manufacturing operatorsThey must:
• Derive more than two-thirds of their revenue from aerospace manufacturing; and
• Either: be a manufacturing facility of aerospace original equipment manufacturers (OEMs); or have certificates of approved supplier status from aerospace companies; or have the following accreditations or regulatory approvals: (i) SAR145 or SAR21 from CAAS (or equivalent from FAA/EASA); or (ii) Nadcap; and
• Be classified under SSIC 30301.
Major suppliers of parts and services for aerospace MROs and manufacturersThey must:
• Carry out one or more of these activities: (a) machining and assembly; (b) tooling; (c) secondary processes; (d) engineering; (e) repair; (f) customised kitting; and (g) inventory management on behalf of aerospace companies and airlines; and
• Derive more than two-thirds of their revenue from aerospace companies and airlines; and
• Either: have certificates of approved supplier status from aerospace companies; or have the following accreditations or regulatory approvals: (i) SAR145 or SAR21 from CAAS (or equivalent from FAA/EASA); or (ii) Nadcap.
Airline fleet management services operatorsThey must:
• Derive more than two-thirds of their revenue from aerospace companies, airlines and fleet owners; and
• Have the following regulatory approvals: (i) SAR145 or SAR21 from CAAS (or equivalent from FAA/EASA); or (ii) Continuing Airworthiness Management Organization (CAMO) from EASA (or equivalent).
Operators providing training for pilots and crewsThey must:
• Be a CAAS-approved Type Rating Training Organisation (or equivalent from FAA/EASA); and
• Derive more than two-thirds of their revenue from airlines.
Tourism,
Hospitality,
Conventions and
Exhibitions 		Qualifying licensed hotelsThey must be a licensed hotel classified under SSIC 551.
Qualifying licensed travel agentsThey must have more than two-thirds of their revenue from their travel agency business, based on the Annual Business Profile Returns submitted to the Singapore Tourism Board (STB) in 2018.
Qualifying gated tourist attractionsThey must:
• Have more than 30% visitorship from tourists, and
• Be classified under SSICs 91021, 91022, 91029, 91030, 93201, or 93209.
CruiseThey must be a cruise line or cruise terminal operator.
Meetings, incentives, conferences and exhibitions venue operators (MICE)They must be purpose-built MICE venue operators.
MICE and tourism event organisersThey must:
• Be impacted by the deferment/cancellation/loss of sales of at least one MICE/leisure event with at least 20% foreign attendees (residing outside Singapore) and originally scheduled in Singapore between 1 Feb 2020 to 31 Dec 2020; and
• Derive more than two-thirds of their revenue from MICE/leisure events with at least 20% foreign attendees (residing outside Singapore); and
• Be classified under SSICs 82301, 82302 or 82303.
Money changersThey must:
• Be licensed by the Monetary Authority of Singapore (MAS) as either “money-changing licensee” or “major payment institution licensee”; and
• Derive more than two-thirds of their revenue from money-changing services.
Regional ferry operatorsThey must:
• Be licensed by the Maritime and Port Authority of Singapore (MPA) as a Regional Ferry Services Operator; and
• Be classified under SSIC 50013.
Central refund agenciesThey must be central refund agencies certified by the Inland Revenue Authority of Singapore (IRAS).

List of Sectors in JSS Support Tier – Tier 1 (only for June 2020 to October 2020 wages); Tier 2 thereafter

SectorSubsectorQualifying Sector
Built EnvironmentBuilt Environment contractorsThey must be classified under SSICs 41, 42, or 43.
Built Environment consultantsThey must:
• Be registered with the Public Sector Panel of Consultants; or
• Be classified under SSICs 71111, 71113, 71121, or 71125.

List of Sectors in JSS Support – Tier 2

SectorSubsectorQualifying Criteria
Food ServicesLicensed food shops and food stalls (including hawker stalls)They must be classified under SSICs 56, or 68104. Licensees registered as individuals will also be included if they make mandatory CPF contributions for their employees.
RetailQualifying retail outletsThey must:
• Hold a valid Film Exhibition licence from the Infocomm Media Development Authority (IMDA); and
• Be classified under SSIC 5914.
Arts and EntertainmentCinema operatorsThey must:
• Hold a valid Film Exhibition licence from the Infocomm Media Development Authority (IMDA); and
• Be classified under SSIC 5914.
Film distributorsThey must:
• Have transacted with IMDA to classify films for exhibition in cinemas between 1 Apr 2019 to 31 Mar 2020; and
• Be classified under SSICs 59131 or 59139.
Arts and Culture organisationsThey must:
• Meet at least one of the conditions of being a: (i) participant in a project, activity, programme or festival supported by the National Arts Council (NAC) or National Heritage Board (NHB) between 1 April 2018 to 31 March 2020; (ii) Museum Roundtable member before 31 March 2020; or (iii) accredited Arts Education Programme (AEP) provider listed in the 2019-2021 NAC-AEP Directory; and
• Be classified under SSICs 85420, 90001, 90002, 90003, 90004, 90009, 91021, 91022, or 91029.
Land TransportRail operatorsThey must:
• Hold a Land Transport Authority (LTA) New Rail Financing Framework licence; and
• Not receive service payments from the Government for the operation of rail services; and
• Derive more than two-thirds of their revenue from rail-related activities.
Point-to-Point (P2P) transport operatorsThey must hold an LTA taxi service operator licence; or an LTA third-party taxi booking service operator licence.
Private bus and limousine operatorsThey must:
• Have “P” plate buses or sedans/multi-purpose vehicles (MPVs) registered as Z10, Z11, R10, R11 vehicles; and
• Be classified under SSICs 49212, 49219, 77101, or 52299.
Marine and OffshoreMarine and OffshoreThey must:
• Derive more than two-thirds of their revenue from the following activities: (i) manufacture and repair of oil rigs; (ii) building of ships, tankers and other ocean-going vessels (including conversion of ships into off-shore structures); (iii) repair of ships, tankers and other ocean-going vessels; (iv) manufacture and repair of marine engine and ship parts; and/or (v) manufacture and repair of oilfield and gas field machinery and equipment components (e.g. derricks, tool joints, process modules and packages); and • Be classified under SSICs 30110, 28112, 28241, or 28242.

List of Sectors in JSS Support – Tier 3B: Sectors that are managing well (JSS support until December 2020 wages, discontinued thereafter)

SectorSubsectorQualifying Criteria
Biomedical SciencesBiomedical SciencesThey must be classified under SSICs 21011, 21012, 21013, 2102, 2103, 266, 325, 46461, 46592, 72101, 72107, or 72109.
Precision EngineeringPrecision EngineeringThey must be classified under SSICs 22191, 22192, 22193, 22199, 22211, 22214, 22215, 22216, 22218, 22219, 2222, 25113, 2513, 2591, 2592, 2593, 2594, 25951, 25959, 25993, 25995, 25997, 25998, 25999, 26127, 2651, 2652, 2670, 271, 273, 28111, 2812, 2814, 2815, 2816, 2818, 2819, 2822, 28243, 28249, 2825, 2826, 2827, 2829, or 283.
ElectronicsElectronicsThey must be classified under SSICs 2611, 26121, 26122, 26123, 26124, 26125, 26126, 26129, 262, 263, 264, or 26801.
Financial Services Financial Services They must:
• Be classified under SSICs 641, 643, 649, 65, and 66; or
• Be MAS-regulated firms classified under SSIC 642.
Information and Communications Technology and MediaInformation and Communications TechnologyThey must be classified under SSICs 4651, 46521, 46523, 46591, 58202, 61, 62011, 62013, 62014, 62019, 6202, 6209, 631, 63909, 72105, 74111, 77341, 78101, 822, or 9511.
MediaThey must be classified under SSICs 46444, 581, 58201, 60, 62012, 63901, or 9101.
Postal and CourierThey must be classified under SSIC 53.
RetailSupermarkets and Convenience StoresThey must be classified under SSICs 4711, or 47192.
Online RetailThey must be classified under SSIC 4791.
Tier 3A: Others (JSS support till March 2021)
OthersAll other employersN/A

For more information, please click here to visit the IRAS JSS website.

Extension of Workfare Special Payment ("WSP")

As part of the Care and Support Package announced at Budget 2020, all Singaporean employees and Self-Employed Persons (SEPs) who received Workfare Income Supplement (WIS) payment for Work Year (WY) 2019 are receiving a $3,000 Workfare Special Payment (WSP) in 2020. The first payment of $1,500 was made to eligible Singaporeans in July 2020. They will receive their next and final tranche of WSP ($1,500) in October 2020.

The WSP has been extended to include lower-wage workers aged 35 and above in 2020 who received WIS payment for WY2020, and who have not already qualified for WSP  previously (see Table 1). A one-off payment of $3,000 will be given to eligible individuals from October 2020 onwards.

Click here to find out more on the Care and Support Package can be found at the Care and Support Package.

Jobs Growth Incentive ("JGI")

There are bright spots amidst the severe economic situation especially in healthcare, F&B, manufacturing, biomedical sciences, financial services, and ICT sectors where they are constantly needing more workers. To support hiring in growing sectors, the Jobs Growth Incentive, or JGI will be launched. The JGI supports the Government’s efforts to create new jobs for workers, with a special focus on mature workers. $1 billion have been set aside to support firms to increase their headcount of local workers over the next six months.

For each new local hire, Government will provide wage subsidy for 12 months:

• Up to 25% for those below 40 years old, subject to cap

• Up to 50% for those aged 40 and above, subject to cap

More details about this programme will be released later this month.

COVID-19 Support Grant

The Covid-19 Support Grant (CSG) was introduced in May to complement the ComCare scheme in these extraordinary times. More than 60,000 residents have benefited, with more than $90 million disbursed so far. 

• The application period has been extended up to December 2020

• Open to both existing CSG recipients and new applicants from 1 October 2020

• Unemployed applicants must demonstrate job search or training efforts to qualify

The Ministry of Social and Family Development will share more details in early September.

Preserving Core Capabilities

Further support for hardest-hit sectors such as aerospace, aviation, and tourism to retain core capabilities.

• $187 million to extend support measures in the Enhanced Aviation Support Package up to March 2021. This package includes cost relief to our airlines, ground handlers, cargo agents and airport tenants so as to support local carriers to regain Singapore’s air connectivity to the world.

• Temporary redeployment programme scaled up for workers in the aviation sector  

• $320 million to boost domestic tourism through tourism credits for Singaporeans (SingapoRediscovers Vouchers)

Startup SG Founder programme

To continue to spur innovation and entrepreneurship, up to $150 million has been set aside. The government will raise the startup capital grant and continue to provide mentorship.

The Ministry of Trade and Industry will provide more details about the StartupSG Fouder Programme later this week.

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China’s Income Tax Policy in Relation to Overseas Income

On 17 January 2020, China’s Ministry of Finance and State Taxation Administration jointly issued the “Announcement on Individual Income Tax Policy in relation to Overseas Income” (Ministry of Finance and State Taxation Administration Announcement 3 of 2020). This announcement applies from the 2019 tax year. This means that income earned overseas by China tax residents will be taxed. 

Announcement 3 sets out the relevant policies regarding this new income tax policy. The key contents include:

  • Classification of overseas income
  • Calculation of taxable income
  • Foreign tax credit (“FTC”)

Residence rules

An individual is domiciled in China if:

(a) They habitually reside in China by reason of permanent registered address, family ties, or economic interests; or

(b) holds a Chinese passport or a hukou (household registration).

Classification of Overseas Income

The following categories of income are considered as overseas income:

Income categoriesBasis of income sourcing
(1) Income from provision of labour services outside China (including employment income and independent personal service income)The overseas location where the labour or employment activities are carried out.
(2) Authors’ remuneration paid and borne by enterprises and other organisations outside China;The overseas location of the enterprise or organisation which pays and bears the remuneration.
(3) Royalties received from the grant of concessions outside China;The overseas location where the concessions are utilised.
(4) Income from business operations and productions outside China;The overseas location where business operation or production is carried out.
(5) Interest and dividend income obtained from enterprises, other organisations and non-resident individuals outside China;The overseas location where the interest and/or dividend paying parties are based.
(6) Income from lease of overseas properties;The overseas location where the leased property is used.
(7) Capital gains from the transfer of real estate, transfer of equity stocks, stock options, or other financial assets (hereinafter referred to as financial assets) of overseas enterprises or other organisations, or from the transfer of other assets outside China;Real estate: the overseas location where the asset is located;
Financial assets: the overseas location where the invested enterprise or other organisation is based.
It is worth noting that if more than 50% of the fair value of the assets of the invested enterprise or other organisation comes directly or indirectly from real estate located in China at any time during the three years (36 consecutive months) prior to the transfer, the gains from the transfer of the assets would be deemed as China sourced.
(8) Incidental income obtained from enterprises, other organisations and non-resident individuals outside China;The overseas location where the incidental income paying parties are based.
(9) Separate rules may apply if otherwise determined by the Ministry of Finance or the State Taxation Administration.N/A

Personal Income Tax Rate

The following table shows the latest Income Tax Rate for residents in China.

Annual taxable income (CNY) Tax rate (%)Quick deduction (CNY)
0 to 36,00030
Over 36,000 to 144,000102,520
Over 144,000 to 300,0002016,920
Over 300,000 to 420,0002531,920
Over 420,000 to 660,0003052,920
Over 660,000 to 960,0003585,920
Over 960,00045181,920

How to calculate Taxable Income?

Domestic and foreign income subject to consolidated tax calculation

Comprehensive income

Annual comprehensive income = comprehensive income within China + comprehensive income from overseas

Income from business operations

Annual operating income = income from domestic operations + income from overseas operations

Losses from business operations in a particular overseas jurisdiction cannot be offset against income from operations in China or other overseas locations. However, the losses may be used to offset business operating income at the same location in future tax years, based on the relevant tax law in China.

Domestic and foreign income subject to separate tax calculation

Income derived from interest, dividends, property lease, property transfer, and incidental income cannot be consolidated with China-sourced income and shall be subject to tax calculation separately.

Foreign Tax credit ("FTC")

Announcement 3 makes it clear that where resident taxpayers receive overseas income during a tax year, FTC will be granted where foreign income tax has been paid in the overseas location in accordance with the tax law in that jurisdiction, subject to limits. The formula is as follows:

Tax / refund due for the tax year = total tax liability for the tax year – overseas tax liability allowable as credit (not exceeding the tax credit limit)

The amount of overseas tax exceeding the tax credit limit can be utilised in the following five tax years.

Overseas income not allowed for FTC

The following are the circumstances that are not allowed and shall be excluded from the FTC claim:

  1. Overseas tax paid or collected by mistake;
  2. Tax which should not be levied in the overseas jurisdiction under the Double Tax Treaty between China and the foreign country (or under the Double Tax Arrangement between Mainland China and Hong Kong and Macao);
  3. Late payment interest and/or penalties imposed by overseas tax authorities for underpayment or late payment of overseas income tax;
  4. Overseas income tax which is due for refund or compensation from the overseas tax authorities;
  5. Overseas income which is tax-exempt under the China IIT Law and Implementation Rules.

Singapore’s Tax Treaty with China

As there is an agreement between The Government of The Republic of Singapore and The Government of The People’s Republic of China, China residents receiving an income from Singapore or vice-versa, will be eligible for double tax relief if conditions are met. However, this is not an exemption of tax, but rather a reduction of tax.
According to Article 22 of the treaty, elimination of double taxation in China shall be eliminated as follows:

(a) Where a resident of China derives income from Singapore the amount of tax on that income payable in Singapore in accordance with the provisions of this Agreement, may be credited against the Chinese tax imposed on that resident. The amount of the credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China.

(b) Where the income derived from Singapore is a dividend paid by a company which is a resident of Singapore to a company which is a resident of China and which owns not less than 10 per cent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Singapore by the company paying the dividend in respect of its income.

In Singapore, double taxation shall be avoided as follows:

(a) Where a resident of Singapore derives income from China which, in accordance with the provisions of this Agreement, may be taxed in China, Singapore shall, subject to its laws regarding the allowance as a credit against Singapore tax of tax payable in any country other than Singapore, allow the Chinese tax paid, whether directly or by deduction, as a credit against the Singapore tax payable on the income of that resident.

(b) Where such income is a dividend paid by a company which is a resident of China to a resident of Singapore which is a company owning directly or indirectly not less than 10 per cent of the share capital of the first-mentioned company, the credit shall take into account the Chinese tax paid by that company on the portion of its profits out of which the dividend is paid.

Note:

Singapore employment income is not taxed in China according to the provisions of Articles 16, 18 and 19 of the treaty, salaries, wages and other similar remuneration derived by a resident of a Singapore State in respect of an employment shall be taxable only in Singapore unless the employment is exercised in the China. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in China.

When it comes to profits earned from interest, royalties and dividend payments, special reduced rates apply, as follows:

Dividends

Dividends paid by a company which is a resident of China to a resident of Singapore may be taxed in Singapore.

However, such dividends may also be taxed in China of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of Singapore, the tax so charged shall not exceed:

(a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital in the enterprise paying the dividends;

(b) in all other cases, dividend payments are taxed at a rate of 10%.

Interest

Income arising from interest issued by a bank or financial institution which is a resident of China to a resident of Singapore, may be taxed in Singapore.

However, such interest may also be taxed in China of which the bank or financial institution paying the interest is a resident and according to the laws of that State, but if the beneficial owner of the interest is a resident of Singapore, the tax so charged shall not exceed:

(a) 7 per cent of the gross amount of the interest if it is received by any bank or financial institution

(b) 10 per cent of the gross amount of the interest in all other cases.

Royalties

Royalties in this treaty means payments of any kind received as consideration for the use of, or the right to use, any copyright of literacy, artistic or scientific work including cinematograph films, or films or tapes for radio or television broadcasting, any computer software, patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience.

These royalties derived from China and paid to a resident of Singapore, may be taxed in Singapore, and vice-versa.

However, if the beneficial owner of the royalties is a resident of Singapore, the tax charged shall not exceed 10 per cent of the gross amount of the royalties.  

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Different Business Structures in Singapore

There are a lot of factors needed to be considered when it comes to choosing a business structure as there are various types of it and each has its own advantages and disadvantages. There are five different types of business entities in Singapore which are:

1) Sole Proprietorship
2) Partnership
3) Limited Partnership
4) Limited Liability Partnership
5) Company

This guide will cater an overview of the numerous types of business entities in Singapore and the differences among them. 

1) Sole Proprietorship

A Sole Proprietorship, also known as a Sole Trader, is a business owned by one person.

Requirements:

He/She has to be either:

  • a Singapore Citizen
  • Singapore Permanent Resident
  • EntrePass Holder,
  • age 18 and above and
  • is not an undischarged bankrupt.
    •  

If a foreigner wishes to set up a business, he/she must designate a local representative.

The local representative must be:

  • A natural person
  • At least 18 years old
  • Of full legal capacity
  • Ordinarily resident in Singapore (i.e. has a Singapore residential address)
  •  

Closing a sole proprietorship

A sole proprietorship business will cease when the proprietor passes away or wishes to end the business. The Business Registration Act requires any person registered under it who has ceased to carry on business to notify the Registrar of this. Failing to do so is an offence and may result in the imposition of a fine.

If the sole-proprietorship is GST registered, the business owner has to apply for cancellation of GST registration with IRAS first.

Things to note

Sole proprietorship is ideal for those who are planning to start a one-person business and don’t expect the business to grow beyond yourself. It is the easiest and simplest to manage, yet the riskiest compared to the other business entities. Otherwise, one should consider this as a serious drawback and it is not recommended to inspiring entrepreneurs.

Profits are taxed at personal income tax rates ranges from 0% to 22%.

It is not a separate legal entity from the business owner and as such, the business owner is personally liable for all the debts and losses of the sole proprietorship, and the business owner can sue or be sued in his or her own name.

2) Partnership

Business partnerships are formed by the agreement between 2 or more individuals (maximum 20)  to carry on a business as co-owners.

Requirements

They has to be either:

  • a Singapore Citizen
  • Singapore Permanent Resident
  • EntrePass Holder
  • age 18 and above and
  • is not an undischarged bankrupt
  •  

 A local manager has to be appointed and is at least 18 years old and is not an undischarged bankrupt.

Closing a partnership

A partnership business will cease when one of the partners dies or when one of the partners wishes to terminate the business with the agreement of the other partners.

If the partnership is GST registered, the partners has to apply for cancellation of GST registration with IRAS first.

Tax Rates

Likewise, the tax rate imposed will be that of the partner, example; if the partner is an individual, the personal income tax rates will apply, if the partner is a company, corporate tax rates would apply. Personal tax rate ranges from 0% to 22%. The partnership income tax is paid by the partnership, but the profits and losses are divided among the partners, and paid by the partners, based on their agreement.

The risk of a partnership are similar to the Sole Proprietorship, thus it is not recommended for high-risk businesses and businesses with enthusiastic growth plans.

A partnership does not have its own separate legal identity from the partners. Therefore, unless otherwise agreed, the partnership will come to an end each time a partner leaves.

3) Limited Liability Partnership

Limited Liability Partnership is the most recent and most advanced business incorporation structure, as it combines the features of both partnerships and companies. It is a separate legal entity from their owners, which means that owners are not responsible for any debts or losses the business incurs.

Requirements

LLP have to have at least two partners who can be individuals (at least 18 years old) or body corporate (company or LLP) .

Every LLP must have at least one manager. He/She has to be who is an ordinary resident in Singapore and age 18 years and above.

Closing a LLP

An LLP will continue to exist until it is dissolved. Dissolution usually occurs after a process called “winding-up” has been completed.

Winding up begins after dissolution, where all partnership affairs will be settled. This includes the completion of unfinished transactions, payments to creditors, liquidation of assets and the distribution of proceeds to various partners.

Then will the partnership be terminated when all the partnership matters have been fully wrapped up.

Things to note

An LLP is capable of:

    • Suing and being sued in its name;
    • Acquiring and holding property in its name;
    • Having a common seal in its name and
    • Doing such other acts and things in its name, as bodies corporate may lawfully do and suffer.

The key features of a limited liability partnership are as follows:

Limitation of liabilities

The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.

Declaration of solvency

LLP must submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.

LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.  It is mainly meant for carrying a profession (e.g. accountants, law firms, architects, etc.) where two or more professionals would like to build a joint practice in a common field, and is not suited for businesses that carry a trade. The owners must enter into detailed agreements about how the profits and management responsibilities are divided.

Perpetual Succession

The LLP has perpetual succession, which means that any change in the partners of a LLP will not affect its existence, rights or liabilities.

3) Company

A company is a separate legal entity and can incur debt, sue and be sued. A company’s business line depends on its structure, which can range from a partnership to a proprietorship, or even a corporation. 

Companies may be either be:

  • public; having 50 members or less, or
  • private; can have more than 50 members. 
  •  

Requirements

Likewise, a company must designate a local director that is at least 18 years old and is an undischarged bankrupt. 

Things to note:

A private limited company is the most common form of the company chosen by entrepreneurs and investors, mainly due to the tax incentives that can be applied for.

A company is considered as a separate legal entity which means that the members of the company will not be held personally liable for the debts or losses of the company. 

Unlike all the other business entities, a private limited company can qualify for tax exemption schemes and is taxed at the effective corporate tax rate of 17%.

Perpetual Succession

Members in a company may come and go but the company will still remain and proceed to continue its business forever or until it is closed down. This means that a company has the characteristics of perpetual succession, thus giving the company a safer and a more stable area for investors to invest their money on and enhance the chances of their investment being a success. 

Closing a Company

A company can cease to exist in one of the two options, either by;

  • winding up or,
  • striking off

Comparison

Sole Proprietorship

Partnership

Limited Liability Partnership

Company

  • It is easy to set up and the cost is minimal.
  • Owner has full control of the business.
  • All the profits generated by the business will belong to the sole-proprietor.
  • Profits are taxed at personal income tax rates
  • No separate legal entity.
  • Has unlimited liability.
  • It can sue or be sued in the owner’s name.
  • No perpetual succession.
  • No corporate tax incentives and benefits.
  • It is easy to set up and the cost is minimal.
  • Easier administration and management of the business.
  • Reduced compliance obligations.
  • No separate legal entity.
  • Has unlimited liability.
  • Flexibility of succession is variable.

  •  

  • It is easy to set up and the cost is minimal.
  • Easier administration and management of the business.
  • Reduced compliance obligations.
  • Separate legal entity.
  • Perpetual succession.
  • Flexibility of succession is variable.
  • Difficult to transfer ownership of business.
  • Higher registration cost and its costly to maintain due to more compliance obligations.
  • Limited liability.
  • Excellent tax benefits.
  • Perpetual Succession.
  • Separate legal entity.
  • Annual General Meeting has to be conducted.
  • Annual Return filing with the Authority.
  • Estimated Chargeable Income and Corporate Tax to be filed.

     

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Rental Relief for SME Tenants in Private Non-Residential Properties

For SME tenants (i.e. with not more than $100 million in annual turnover) with qualifying leases or licences commencing before 25 March 2020, the Government will provide a new cash grant to offset their rental costs as stated in Table 1.

SME property owners who run a trade or business on their own property will also be eligible for the new cash grant. Vacant property and land under development will not be eligible.

Implementation of the New Government Cash Grant

The new government cash grant will be disbursed automatically by IRAS to the qualifying property owners.

The amount of grant will be calculated based on the Annual Values of properties for 2020, as determined by IRAS at 13 April 2020.

For property owners whose properties are only partially let out, or whose properties are let out to both SME and non-SME tenants under a single property tax account, they will not automatically receive the government cash grant.

In such instances, the property owner should submit an application to IRAS, and provide supporting documents, including proof of SME tenants within its property. IRAS will pro-rate the government cash grant accordingly.

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Fortitude Budget 2020

Job Support Scheme ("JSS")

Current Treatment

The temporary enhancement to  the JSS for the month of April 2020 will raise the wage support to 75% in that month. This will apply to the first S$4,600 of gross monthly wages paid to local workers (Singapore Citizens and Permanent Residents) in all sectors.

The first JSS payout (“Payout 1”) has been brought forward to  April 2020.

For April 2020 payment, the government will give an Cash Grant of up to 75% of Oct 2019 wages. Subsequently, the Cash Grant in July 2020 will be adjusted downwards by 50% of Oct 2019 wages.

New Treatment

Extended for 1 more month to cover wages paid in August 2020, bringing a total coverage to 10 months of wages. The support for August 2020 wages will be paid out in October 2020 (see Table 1 for an overview of the JSS payment schedule).

  • 25% to 75% of the first $4,600 of wages for each local employee

Only employers who are not  allowed to resume operations will continue to receive 75% support for wages paid to local employees, during the period for which they are not allowed to resume operations, or until August 2020, whichever is earlier. Pro-ration will be applied if operations resume in the middle of the month.

Increased support for some affected sectors (e.g. aerospace, retail, marine and offshore) from 25% to 50% or 75%

SGUnited Jobs

Current Treatment

10,000 jobs will start with the public sector recruiting for long-term roles in essential services such as social services, early childhood education and infocomm technology.

Temporary jobs to handle the increase in Covid-19-related operations will also be available in roles such as health declaration assistants and temporary management support officers.

Private sector job opportunities will also be identified together with the Singapore Business Federation and other trade associations and chambers. 

There will be a series of SGUnited Jobs Virtual Career Fair (VCFs) upcoming up.Details of the VCF is available here: mycareersfuture.sg

New Treatment

40,000 jobs aimed to be created in 2020 of which about 15,000 openings will be in the public sector. These consist of a variety of long-term and short-term roles, to meet future and immediate needs. 

The public sector is bringing forward agencies’ hiring plans, creating jobs in new capabilities and functions, and creating short-term jobs arising from COVID-19 operations. The public sector will also provide two-year positions to local jobseekers and train them in key capability areas, to eventually place them in relevant private sector jobs.

The relevant Government agencies will work with businesses to create about 25,000 jobs. To help jobseekers continue to access good longer-term job opportunities, agencies will also work with programme partners to scale up the capacity of career conversion programmes, including the Adapt and Grow programmes, to more than 14,000 places this year, especially in growth sectors such as Infocomm & Technology and Financial Services.

SGUnited Traineeships and Mid-Career Traineeships

Current Treatment

Workforce Singapore (WSG) will co-share manpower costs with enterprises that offer up to 8,000 traineeships targeted at local first-time jobseekers this year.

Firms that offer traineeships targeted at local first-time job seekers this year can receive funding from government agency Workforce Singapore (WSG) under this SGUnited Traineeships programme.

These will include science and technology stints in research and development labs, deep-tech start-ups, accelerators and incubators, said DPM Heng.

Participants will receive an allowance co-funded by the Government and firm they are attached to.

New Treatment

Given the strong interest from businesses and public agencies, the Government aims to more than double the number of traineeships available for our young locals this year, from 8,000 to 21,000. Of these, there will be new traineeship positions in our R&D sector, including our universities, A*STAR research institutes, AI Singapore, and local deep-tech startups through SG Innovate. Recent and new graduates can apply for these opportunities on MyCareersFuture.sg from 1 June 2020 onwards.

To cater to the needs of mid-career individuals, we will create a new SGUnited Mid-Career Traineeships programme, to facilitate about 4,000 more traineeships for unemployed midcareer jobseekers looking to gain meaningful industry-relevant work experience and boost employability for future job opportunities. This will be on top of the 21,000 opportunities under the SGUnited Traineeships. More details will be provided in due course.

Overall, both programmes aim to facilitate about 25,000 traineeship opportunities for our young locals and experienced professionals.

SGUnited Skills

Current Treatment

Not applicable.

New Treatment

The SGUnited Skills (SGUS) programme is a full-time training programme ranging from 6 to 12 months. The programme will comprise certifiable courses delivered by companies and the Continuing Education Training (CET) Centres, including Institutes of Higher Learning. The training courses are designed in partnership with the industry, and can include companies co-delivering and co-designing the programme with training providers. Trainees will also have the chance to apply the skills learnt during the programme, through opportunities like workplace immersions and industry projects.

Trainees will also benefit from employment facilitation efforts offered by training providers. To facilitate transition to employment as and when job opportunities are present, the SGUS programme will be conducted in a modular format.

Trainees will also receive a training allowance of $1,200 per month for the duration of the programme, to cover basic subsistence expenses. Course fees will be highly subsidised, to keep SGUS affordable. Individuals can use their SkillsFuture Credit to offset the course fees.

More details on the SGUS programme will be provided by the Ministry of Education. 

Hiring Incentive

Current Treatment

Employers who hire local workers aged 40 and above through eligible reskilling programmes. For each eligible worker hired, the employer would receive 20% salary support for six months, capped at $6,000 in total. Eligible reskilling programmes were the Professional Conversion Programmes (PCPs), Place-and-Train (PnT) programmes for rank-and-file workers, and career transition programmes by Continuing Education and Training (CET) centres.

New Treatment

the Hiring Incentive will be enhanced to cover local workers of all ages, with increased support for those aged 40 and above. We will also expand the list of eligible reskilling and training programmes. The enhanced Hiring Incentive will be applicable to any hire from eligible reskilling programmes from 27 May onwards. A summary of the enhancements to the Hiring Incentive is in Table 2. 

Foreign Worker Levy Waiver & Rebate

Current Treatment

  • Waiver of monthly Foreign Worker Levy (FWL) due in April 2020 to help firms with cash flow
  • FWL rebate of $750 in April 2020 from levies paid this year, for each Work Permit or S Pass holder

New Treatment

Extended by up to 2 months for businesses that are not allowed to resume operations after the circuit breaker.

  • 100% waiver and $750 rebate in June 2020
  • 50% waiver and $375 rebate in July 2020 

As at 27 June 2020, construction firms will also be eligible for Foreign Worker Levy rebates of $90 per month for each work permit holder, from August 2020 to December 2021.

Deferment of Higher CPF Contribution Rates

Current Treatment

Not applicable.

New Treatment

To help businesses manage costs in these challenging times, the Government will defer the planned increase in CPF contribution rates for senior workers by one year, from 1 January 2021 to 1 January 2022. The CPF Transition Offset scheme will similarly be deferred until after the higher contribution rates take effect.

Expanding Rental Relief for SMEs

Current Treatment

  • 1-month rental waiver for office, industrial, and agriculture tenants of Government agencies.
  • Laws to ensure property owners pass on Property Tax rebate to tenants.

New Treatment

$2 billion in cash grants to help SME tenants with rental costs

Including the Property Tax Rebate for 2020, Government will:

  • Offset 2 months’ rental for qualifying SME tenants of commercial properties
  • Offset 1 month’s rental for qualifying SME tenants of industrial and office properties

Rental Relief for Government Tenants

Current Treatment

Stallholders at hawker centres and markets managed by the National Environment Agency (NEA) will be given three months’ worth of rental waiver, with a minimum waiver of $200.

Commercial tenants in other government-owned or managed facilities will be provided with two months’ worth of rental waivers. 

Other Non-Residential Tenants. Government agencies such as JTC, SLA, HDB, URA, BCA, NParks, and PA will provide half a month’s worth of rental waiver to eligible tenants of other non-residential premises who do not pay Property Tax. Eligible tenants/lessees may include those in premises used for
industrial or agricultural purpose, or as an office, a business or science park, or a petrol station.

New Treatment

Additional 2 months of rental waivers for commercial tenants and hawkers. The total rental waiver will now be four months for commercial tenants. Stallholders in hawker centres and markets managed by Government
agencies will get a total of five months of rental waivers. 

For industrial, office, and agricultural tenants of Government agencies, one more month of rental waiver will be provided. A total of two months of rental waiver will be received.

Financing Support for Promising Startups

Current Treatment

  • Enterprise Financing Scheme – SME Working Capital Loan
  • Enterprise Financing Scheme – Trade Loan
  • Loan Insurance Scheme
  • Temporary Bridging Loan Programme (TBLP)

New Treatment

$285 million of additional financing support for promising startups by co-investing with the private sector

  • On top of $300 million set aside under the Unity Budget for deep-tech startups

Adopting e-Payments

Current Treatment

Not applicable.

New Treatment

Bonus of $300 per month over 5 months to encourage adoption of e-payments by stallholders in 

  • Hawker centres
  • Wet markets
  • Coffee shops
  • Industrial canteens

Digital Resilience Bonus

Current Treatment

  • E-invoicing Registration Grant
  • Advanced Digital Solutions
  • SMEs Go Digital

New Treatment

Eligible businesses can receive a payout of up to $5,000 if they adopt PayNow Corporate and e-invoicing, as well as business process or e-commerce solutions.

Businesses which already have basic digital capabilities, should deepen their digital transformation. We will help them make use of advanced digital tools in an integrated way. 

  • The Digital Resilience Bonus will have an additional tier of $5,000 for F&B and retail businesses which also incorporate advanced solutions.

National Innovation Challenges

Current Treatment

Not applicable.

New Treatment

Encourage partnership with the private sector for industry-led solutions to reopen Singapore safely

Covid-19 Support Grant (CSG)

Current Treatment

The scheme eligibility criteria are as follows:

  • Singapore Citizens or Permanent Residents, aged 16 years and above,
  • who are presently unemployed due to retrenchment or contract termination as a result of the economic impact of the COVID-19 situation, and meet all of the following:
  • Had a monthly household income of not more than $10,000, or per capita household income not more than $3,100 per month prior to unemployment;
  • Lives in a property with an annual value of not more than $21,000; and
  • Not currently receiving ComCare Short-to-Medium Term Assistance(SMTA) or ComCare Interim Assistance.
  • The applicant must have been employed as a full-time, or part-time permanent, or contract staff prior to unemployment.

Successful applicants will receive a monthly cash grant of S$800, for three months.

The scheme will be open for application from May 2020 to September 2020.

Individuals who are eligible may submit their application at their nearest Social Service Office,

New Treatment

Support for Singaporeans and PRs who:

  • Have lost their jobs;
  • Are placed on no-pay leave; or,
  • Face significantly reduced salaries

Up to $800 per month for 3 months for eligible recipients

Solidarity Utilities Credit

Current Treatment

New Treatment

  • One-off $100 Solidarity Utilities Credit for each household with at least one Singapore Citizen
  • Covers all property types
  • Will be credited in households’ July or August 2020 utilities bills with SP Group
  • Larger households with five or more members get more, and can receive up to $1,000 in U-Save rebates this year

For Students and Seniors - Fostering Digital Inclusion

Current Treatment

Not applicable.

New Treatment

For Students

  • Accelerated timeline for all secondary school students to own a digital learning device

For Seniors

  • Seniors Go Digital movement to build digital literacy through one-to-one coaching and small-group learning
  • Financial support for lower-income seniors to own digital devices

Enhanced Fund-Raising (EFR) Programme​​

Current Treatment

Totalisator Board (TB) provides 40% matching on donations raised by charities, capped at $100,000 per fund-raising project. For example, an eligible charity project which raises $10,000 will receive $4,000 in matching grants from TB. This applies to all modes of donations, including those through approved digital platforms such as Giving.sg or the websites of the individual charities.

New Treatment

  • Dollar-for-dollar matching on eligible donations raised between 1 April 2020 to 31 March 2021, capped at $250,000 matching per charity
  • Additional $100 million top-up to strengthen support for charities
To be eligible, the charity must be registered with the Commissioner of Charities. Qualifying donations are those raised through approved fund-raising projects commencing from 1 April 2020 to 31 March 2021 (both dates inclusive). In addition, the fund-raising project should not have benefited from other Government matching funds, such as the Cultural Matching Fund or the Bicentennial Community Fund.

Invictus Fund

Current Treatment

Not applicable.

New Treatment

The Invictus Fund was set up by the National Council of Social Service (NCSS) to channel donations to SSAs which deliver critical social services to vulnerable groups during COVID19. The Invictus Fund is supported by donations raised through Community Chest, which
receives 20% matching from the Bicentennial Community Fund.

As at 22 May 2020, $6.2 million has been raised for the Invictus Fund. 171 SSAs applied for the Invictus Fund in the first round of applications.


The Government will provide a top-up of $18 million to the Invictus Fund to enhance support for SSAs which continue serving their beneficiaries during this period. 

Construction Support Package

Construction Restart Booster

A $525.8 million construction restart booster will be made available to help construction firms, which have to incur additional compliance costs unique to the sector in order to resume works safely. This funding will co-share contractors’ costs in procuring additional material/equipment to comply with COVID-Safe Worksite requirements (e.g. additional portable toilets, PPEs, masks, barricades). The funding will be given to construction projects regardless of whether they have restarted or are pending restart, as these compliance costs would eventually be incurred.

Co-funding salaries of Safe Management Officers (SMOs)

Contractors are required to deploy SMO(s) to ensure that safe management measures are implemented at construction worksites. Even though the SMO position can be taken up by an existing employee rather than as a new hire, Government will set aside $48 million to co-fund 50% of salaries of SMOs who are Singapore citizens or permanent residents for six months from September 2020 to February 2021, provided that the firms adhere to COVID-Safe Worksite practices.

Co-sharing of prolongation costs for public sector projects

Government Procurement Entities (GPEs) will co-share the prolongation costs for public sector construction contracts and tenders which closed before 1 June 2020. This will add up to $793 million. GPEs will co-share 50% of the prolongation cost, capped at 1.8% of contract sum. Main contractors for public sector construction projects may submit claims for the following prolongation cost for delays which are accompanied by certified Extensions of Time (EOTs) due to COVID-19:

a)    Rental of plant and equipment by main contractors and the sub-contractors;
b)    Other project-related costs such as vector control, insurance, etc.

In these challenging times, developers undertaking private sector projects should also likewise adopt similar practices to co-share prolongation costs with contractors for private sector projects.

Extension of Advance Payment for public sector projects

As some construction projects have not fully resumed work yet, the Government will extend advance payment to firms working on public sector projects. Main contractors of public sector projects were earlier granted advance payments for the months of April and May 2020. GPEs will now extend advance payment up to the point when the projects have obtained approval to restart, subject to a total advance payment cap of 5% of the project’s awarded contract sum or $10M, whichever is lower. Main contractors will be required to pass on a portion of the advance payment to their sub-contractors within two weeks of receiving the payment certificate from GPEs.

Extension of Government subsidies for COVID-19 tests

As part of BCA’s COVID-Safe Workforce criteria, employers should ensure that their employees undergo periodic swab tests to safeguard the health and safety of their employees as required. This includes all construction work permit holders and S Pass holders (except for those working in company office premises) and Singapore Citizens/ Permanent Residents/ Employment Pass holders working on construction sites. The Government had earlier announced that it would pay for the periodic swab test for construction work permit holders and S-pass holders, up to August 2020. The Government will now continue to bear the costs of COVID-19 testing for the construction sector until 31 March 2021, to help ensure a safe restart of the construction sector.

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How to pass property tax rebate from property owner to tenant

Resilience Budget on property tax

As part of the Resilience Budget announced on 26 Mar 2020, qualifying nonresidential properties (“qualifying properties”) will be granted up to 100% of property tax rebate for the period of 1 Jan 2020 to 31 Dec 2020.

For most properties that are eligible for 100% property tax rebate, this is equivalent to slightly more than one month’s rental.

Owners of qualifying properties are required to unconditionally and fully pass on to their tenant(s) the rebate for the property tax account that is attributable to the rented property, by either reducing or offsetting current or future rentals or through a payment to their tenant(s), within the prescribed time frame.

Prescribed Amount of Rebate for Passing on – Where the Whole Property is Leased or Licensed to Single Tenant

There are two options for the property owner to fulfil his obligation in passing on the prescribed amount of rebate to his tenant(s), Option 1A and Option 2A.

Option 1A

The owner must pass on to a tenant the total of the sums calculated for each month of the year 2020 in which the tenant rents the property.

PTR / 12 X D/D(Month)

“PTR” is:
(a) the rebate amount for the property before any change in circumstances occurs;
(b) Zero, if there is no rebate amount mentioned in (a); 

“D” is the number of days in the month for which the tenant is a prescribed lessee or prescribed licensee of the property;

“D(Month)” is the number of days in the month

Option 2A

The property owner may choose to pass on the whole of the rebate amount of the property to:
(a) The tenant of the property on 3 April 2020;
(b) If there is no tenant as mentioned in (a) for the property, the first tenant  of the property in the period between 4 April 2020 and 31 July 2020 (both dates inclusive); or
(c) If there is no tenant of the property, in paragraphs (a) or (b), then only Option 1A applies.

Prescribed Amount of Rebate for Passing on – Where Part of Property is Leased or Licensed to Tenant or Different Parts of the Property are Leased or Licensed to Different Tenants

There are two options for the property owner to fulfil his obligation in passing on the prescribed amount of rebate to his tenant(s), Option 1B and Option2B.

The property owner has to adopt the same option, either Option 1B or Option 2B, in respect of the different parts of the property.

Option 1B

The owner must pass on to a tenant the total of the sums calculated for each month of the year 2020 in which the tenant is such a lessee or licensee.

𝑁𝑅 × 10% × 𝑃𝑇𝑅(%) × 𝐷/𝐷(𝑀𝑜𝑛𝑡ℎ)

“D” is the number of days in the month for which the tenant is a prescribed lessee or prescribed licensee of the part of the property;
“D(Month)” is the number of days in the month;
“NR” is the net rent* payable by the tenant for the part of the property for the month;
“PTR(%)” is the rate of the property tax rebate granted for the part of the property

*This net rent is the rent, licence fee or similar payment payable by the prescribed lessee or prescribed licensee of the property or part of the property to the owner of the property under the lease or licence agreement between the prescribed lessee or prescribed licensee and the owner which (a) Includes the following amounts payable under the agreement:
(i) any amount determined by the gross turnover (GTO)** of any business carried on by the lessee or licensee at the property or part of the property;
(ii) fees for repair, insurance, maintenance and upkeep of the property or part of the property, and property tax payable by the owner; but
(b) Excludes the following amounts payable under the agreement:
(i) any amount in respect of the provision of services (e.g. cleaning,
refuse disposal and advertising and promotion) by the owner to the lessee or licensee; and (ii)any goods and services tax.

Where for any month, the month amount plus previous months cumulative amount determined using Option 1B for every tenant  would together exceed the rebate amount for the property, the amount of that rebate amount less the previous months cumulative amount is to be passed on to each tenant on a proportionate basis if there is more than one subject tenant; or the tenant in whole, if there is only one tenant

Option 2B

The property owner may choose to pass on the rebate for each part of the property as follows:
(a) Where the part of the property is granted a property tax rebate of 100% or 60%, an amount of at least 1.2 x AR
(b) Where the part of the property is granted a property tax rebate of 30%, an amount of at least 0.36 x AR
to the tenant as follows:

(i) The tenant of the part of the property on 3 Apr 2020;
(ii) If there is no tenant as mentioned in paragraph 9.17(i) for the part of the property, the first tenant of that part in the period between 4 Apr 2020 and 31 Jul 2020 (both dates inclusive); or
(iii) If there is no tenant of the property, in paragraphs 9.17(i) or (ii), then only Option 1B applies. 

“AR”’ is the average net rent* per month payable by the tenant for the part of the tenant’s lease or licence that falls in the period starting on 1 Jan 2020 and the last day of the month immediately before the month in which the owner passes on or begins to pass on the benefit (both days inclusive). If the duration of the lease or licence in the period 1 Jan 2020 and the last day of the month in which the owner passes on or begins to pass on the rebate (both days inclusive) is less than one month, the net rent payable for that part of the month must be used to determine a proportionate amount for the whole month, which is then to be treated as the average net rent per month for the period.

Where the sum total of the amounts determined for all such tenants of the property would exceed the rebate amount for the property, then the amount of rebate must be passed to those tenants on a proportionate basis.

 

 

Posted on

IRAS – Extended Filing Deadline [Updated]

Due to the extended Circuit Breaker to 1 June 2020, IRAS is providing an automatic extension of deadlines for tax filing for individuals and businesses.

Tax TypeOriginal Filing DeadlineExtended Filing Deadline
[New]
Income Tax for Individuals (including sole
proprietors and partnerships)		18 Apr 202031 May 2020
Income Tax for Trusts, Clubs and
Associations		15 Apr 202030 Jun 2020
[Updated]
Estimated Chargeable Income (ECI) for
companies with Financial Year ending
Jan 2020		30 Apr 202030 Jun 2020
[Updated]
Estimated Chargeable Income (ECI) for
companies with Financial Year ending
Feb 2020		31 May 202030 Jun 2020
[Updated]
GST Returns for accounting period ending
Mar 2020		30 Apr 202011 May 2020
S45 Withholding Tax Forms due in Apr 202015 Apr 202015 May 2020
Tax Clearances for foreign employee in
Apr 2020		–30 Jun 2020
[Updated]
Tax Clearance for foreign employees
due in May 2020		–30 Jun 2020
[Updated]

Posted on

Support Measures during extended Circuit Breaker period until 1 June 2020

On 21 April 2020, the Multi-Ministry Taskforce announced that it would extend the circuit breaker period until 1 Jun 2020 (inclusive).

Supporting Workers and Businesses

The Government will extend the 75% JSS on the first $4600 of gross monthly wages for local employees across all sectors for another month, i.e. in the month of May 2020. This enhanced payout for May 2020 will be disbursed by end-May 2020 via PayNow or having existing GIRO arrangements with IRAS. Other employers will start receiving their cheques in early-June. The Government encourage all employers to sign up for PayNow to receive payouts faster.

Similar to the arrangement for April, the 75% subsidy for May 2020 will first be computed and disbursed based on November 2019 wages, thereby ensuring speedy disbursement. Subsequently, we will adjust future JSS payouts to account for actual wages paid in May 2020, relative to November 2019. 

Employers who put local employees on mandatory no-pay-leave or retrench them will not be entitled to the enhanced JSS payout for those employees.

Jobs Support Scheme ("JSS") to cover Shareholder-Directors

The Government has extended the Jobs Support Scheme, to cover wagers of employees of a company who are also shareholders and directors of the company. 

This support is only applied to companies that were registered on or before 20 April 2020, and for the wages of shareholder-directors with Assessable Income of $100,000 or less for Year of Assessment 2019. The May 2020 and subsequent JSS payouts will include support for qualifying shareholder-directors. The May 2020 payout will also include back-payment for companies with qualifying shareholder-directors whose wages were excluded from the first JSS payout in April 2020.

Foreign Worker Levy Waiver and Rebate extended by 1 month

The Government will extend the Foreign Worker Levy (FWL) waiver and FWL rebate by one month, to ease labour costs of firms that employ foreign workers in this period. 

As with the initial introduction of the waiver and rebate, this assistance will support firms with workers who are unable to work due to the circuit breaker and/or Stay Home Notice (SHN) measures. Firms should use the assistance for their workers’ wages and subsistence needs. MOM will provide further details.