Singapore Budget 2025 introduces a range of tax benefits designed to enhance financial resilience, support businesses, and ease the tax burden for individuals as part of SG60. With a focus on sustainable growth and recovery, these measures aim to drive innovation, encourage investment, and foster long-term stability in a shifting economic landscape and ever-uncertain macro environment.
Whether you are an individual seeking relief or a business struggling with rising costs, Budget 2025 presents tailored incentives that cater to diverse needs. This blog unpacks the key tax benefits unveiled, offering valuable insights to help you maximise these opportunities and align with Singapore’s forward-looking vision for sustained growth.
Singapore Budget 2025 Tax Highlights
Improvements to Section 13W of the Singapore Income Tax Act 1947
Changes will be made to Section 13W of the ITA to enhance the tax treatment of investments and will apply to disposal gains acquired on or after 1 January 2026. The enhancements include:
- Removal of the sunset clause to make the scheme permanent
- Expansion of qualifying gains currently limited to ordinary shares to include those from the disposal of preference shares accounted for as equity
- Group-based assessment of shareholding threshold terms
The removal of the sunset provision is key to providing certainty and removing investors’ doubts. These enhancements are expected to encourage taxpayers to increasingly consider using preference shares that provide greater flexibility in capitalisation and cash repatriation.
The 20% shareholding threshold can now be assessed on a group basis. This recognises the fact that a group may hold its entities through any number of holding vehicles.
Corporate Income Tax Rebate for YA 2025
The Singapore government announced a tax rebate of 50% for businesses for the Year of Assessment (YA) 2025. It also recognises that not every business will benefit from this rebate, and will hence provide every active company that employed at least 1 local employee in 2024 with a minimum S$2,000 cash grant.
The rebate will be capped at S$40,000 for each company, the same as that for YA 2024, which includes both the rebate and cash grant. Eligible companies will automatically receive the money from the 2nd quarter of 2025.
Extension to the Double Tax Deduction for Internationalisation (DTDi) Scheme
The DTDi scheme supports businesses in overseas expansion with a 200% tax deduction on eligible expenses for certain activities performed across key stages, providing certainty for companies pursuing long-term growth. It will be extended to 31 December 2030.
Tax Incentives for Singapore-Based Companies and Fund Managers
As enterprises expand, they might also list on a stock exchange to access more capital. Bigger firms with sizeable overseas revenues will usually opt to list abroad to be closer to their main
consumer markets.
The government recognises and accepts these as commercial decisions. However, it also sees that there has been feedback that the Singapore Stock Exchange (SGX) is not attractive, even for businesses that are focused mainly on Singapore and the Southeast Asia region.
Therefore, it established the Equities Market Review Group in August 2024, chaired by Transport Minister and Second Minister for Finance Minister Chee Hong Tat, to strengthen the attractiveness of Singapore’s stock market to such listings and investments.
The review group’s first set of measures, submitted before Budget 2025, include several tax-related recommendations that have been accepted, leading to the introduction of tax incentives for Singapore-based companies and fund managers that choose to list in Singapore and grow their economic activities here.
A tax incentive for fund managers who invest substantially in Singapore-listed equities will also be introduced to encourage more investment in our capital markets.
The measures are expected to drive new listings in Singapore and boost investment demand for Singapore-listed equities.
Corporate Income Tax Rebate for Singapore-Based Companies
A corporate tax rebate will be provided to Singapore-based companies that plan to go public:
- Primary listing: 20% corporate income tax rebate
- Secondary listing: 10% Corporate income tax rebate
The rebates will be capped at S$6 million per YA for qualifying firms with a market cap of at least S$1 billion. Companies with a market cap of less than S$1 billion will have a rebate capped at S$3 million every year.
Enhanced Concessionary Tax Rate
Singapore fund managers, where the fund manager or its holding company achieves a primary listing on SGX, will get an enhanced concessionary tax rate of 5% on qualifying income.
They must remain listed for 5 years. A portion of its profits needs to be distributed as dividends and fulfil requirements for minimum professional headcount and assets under management.
The scheme will be available until 31 December 2028.
Tax Exemption for Fund Managers
There will also be a tax exemption for fund managers that invest significantly in Singapore-listed equities.
New funds must have at least 30% of assets under management (AUM) invested in Singapore-listed equities to get the tax exemption on qualifying income.
Existing funds must also meet the same requirement and, at the same time, net inflow of capital (subscriptions less redemptions to funds) must be at least 5% of the fund’s AUM in the preceding year.
These incentives are expected to make the idea of listing on the SGX more attractive by boosting its cost-effectiveness and overall practicality.
Personal Income Tax Rebate for YA 2025
Singapore turns 60 in 2025. As part of the SG60 package aimed at recognising Singaporeans’ contributions, the government will provide a personal income tax rebate of 60% for YA 2025.
This will be capped at S$200 per taxpayer to provide financial relief especially to the lower to middle income earners.
Progressive Wage Credit Scheme
- 2025: From 30% to 40% for wage increase
- 2026: From 15% to 20% for wage increase
The above increases are subject to qualifying conditions.
Understand How You Can Benefit With Expert Guidance
The tax enhancements in Singapore’s Budget 2025 reflect the government’s commitment to empowering businesses and supporting individuals while fostering sustainable economic growth. These initiatives present valuable opportunities for financial relief and development amidst uncertain times.
By understanding and leveraging these changes with our expert tax team’s guidance, you can position yourself or your business to benefit fully. Contact us to find out how we can help today!
FAQs about Singapore Budget 2025
Is there tax exemption for Singapore Budget 2025?
- Yes, a tax exemption will be introduced for qualifying income from fund management and investment advisory activities related to funds that invest substantially in Singapore-listed equities.
What is the Singapore Budget 2025 tax benefit for companies?
- Some tax benefits include a CIT rebate of 50% and the extension to the DTDi scheme.
How can InCorp help my business with taxation?
- InCorp can assist your business with tax in several impactful ways, ensuring compliance, optimisation, and strategic planning.
Find out how you can make the most of Budget 2025’s tax benefits!
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