Singapore Budget 2026: Key Tax Announcements

1

Corporate Income Tax (“CIT”) Rebate

For YA 2025, a CIT Rebate of 50% of tax payable was granted.

Active companies that employed at least one local employee in Calendar Year 2024 received a minimum benefit of $2,000 in the form of a CIT Rebate Cash Grant, with the overall cap of $40,000 applying to the combined amount of the CIT Rebate and CIT Rebate Cash Grant.

For YA 2026, a CIT Rebate of 40% of tax payable will be granted.

Active companies that employed at least one local employee in Calendar Year 2025 will receive a minimum benefit of $1,500 in the form of a CIT Rebate Cash Grant, with the overall cap of $30,000 applying to the combined amount of the CIT Rebate and CIT Rebate Cash Grant.

2

Double Tax Deduction for Internationalisation (“DTDi”) scheme

Businesses are allowed a 200% tax deduction on eligible expenses incurred on 16 qualifying market expansion and investment development activities, with tax deduction on the first $150,000 of eligible expenses for certain activities per YA without prior approval and otherwise, with prior approval from Enterprise Singapore or Singapore Tourism Board.

From YA 2027, the expenditure cap for claims without prior approval will be raised to $400,000 per YA. Further, the scope of claims which do not require prior approval will also be expanded to cover all eligible expenses incurred on overseas market development trips and overseas investment study trips, and prescribed qualifying activities.

In all other cases, the businesses can continue to apply to Enterprise Singapore or Singapore Tourism Board for a prior approval.

3

Enterprise Innovation Scheme (“EIS”)

The qualifying businesses can claim 400% tax deductions/allowances on qualifying expenditure incurred on the prescribed qualifying activities (e.g. R&D, IP related, upskilling and innovation projects).

The expenditure cap is $400,000 for each YA for most of the qualifying expenditure, with a cap of $50,000 for each YA in relation to innovation projects with partner institutions.

Businesses have the option to convert a portion into cash payout within the prescribed limits.

For YA 2027 and YA 2028:

The list of partner institutions will be expanded to include the Sectoral AI Centre of Excellence for Manufacturing.

Businesses can claim tax deductions/ allowances of 400% on up to $50,000 of qualifying AI expenditures (new qualifying activity) incurred for each YA with no option for cash payout.

4

Finance and Treasury Centre (“FTC”) incentive

Approved FTCs are eligible for a concessionary tax rate of 8% or 10% on qualifying income and for withholding tax exemption on interest payments on loans used for qualifying activities or services.

The FTC incentive will be extended till 31 December 2031 (scheduled to lapse after 31 December 2026).

The scope of the withholding tax exemption will be expanded to include interest-like borrowing costs for payments made on or after 13 February 2026.

5

Global Trader Programme (“GTP”)

Approved global trading companies are eligible for a concessionary tax rate of 5%, 10%, or 15% on income from qualifying transactions in qualifying commodities.

The scheme will be extended until 31 December 2031 (scheduled to lapse after 31 December 2026).

The list of qualifying commodities will be expanded to include Environmental Attribute Certificates from 13 February 2026.

6

Withholding tax exemptions for the financial sector

A range of withholding tax exemptions is available to financial institutions for payments made under specific types of financial transactions.

At a high level, these include structured products, OTC derivatives, cross currency swap transactions, interest payments on margin deposits made under all derivatives contracts, payments made under securities lending or repurchase agreements, payments under interest rate or currency swap transactions).

The withholding tax exemptions will be extended till 31 December 2031 (scheduled to lapse after 31 December 2026).

7

CPF cash top-ups under the Voluntary Contributions to MediSave Account scheme (“VC-MA”)

Platform operators cannot claim tax deduction for CPF cash top-ups made on behalf of platform workers under the VC-MA (while employers can on behalf of their employees).

From YA 2027, Platform operators will be allowed to claim tax deduction for CPF cash top-ups made on behalf of their platform workers (who are eligible for the Matched MediSave Scheme) under the VC-MA.
 

8

Extend the 250% tax deduction for qualifying donations to Institutions of a Public Character (“IPCs”) and eligible institutions

Donors are eligible for a 250% tax deduction for qualifying donations made to IPCs and eligible institutions. These include gifts of shares / units trusts listed on the Singapore Exchange (“SGX”), Cash donations, Gifts of artefacts, Gifts of parcels of land or buildings, donation and related work for sculptures and works of art for public display.
 

The tax deduction will be extended to qualifying local donations made from 1 January 2027 to 31 December 2029 (scheduled to lapse after 31 December 2026).

9

Corporate Volunteer Scheme (“CVS”)

All businesses carrying on a trade or business in Singapore can claim 250% tax deductions on qualifying expenditure (such as wages) incurred in respect of time spent in doing services for IPCs.

The qualifying expenditure is subject to an annual cap of $250,000 per business per YA and $100,000 per IPC per CY.

The tax deduction under the CVS will be extended to qualifying expenditure incurred from 1 January 2027 to 31 December 2029 (scheduled to lapse for expenditure incurred after 31 December 2026).

10

Not-for-Profit Organisation Tax Incentive (“NPOTI”)

The NPOTI provides tax exemption on the income derived by an approved NPO.
 

The NPOTI will be extended till 31 December 2032 (scheduled to lapse after 31 December 2027).

11

Investment Allowance for Emissions Reduction (“IA-ER”) scheme

Investment allowance can be granted to companies for capital expenditure incurred for approved projects that improve energy efficiency or reduce greenhouse gas emissions.

The IA-ER scheme will be allowed to lapse after 31 December 2026.

The Government will continue to support efforts to improve energy efficiency or reduce greenhouse gas emissions via existing schemes such as the Resource Efficiency Grant for Emissions and the Refundable Investment Credits for Decarbonisation.

12

Qualifying upfront costs attributable to rated retail bonds

Bond issuers that are carrying on a trade or business in Singapore can claim a 200% tax deduction on qualifying upfront costs that are attributable to rated retail bonds issued from 19 May 2021 to 31 December 2026 under the Seasoning Framework and Exempt Bond Issuer Framework.

The double tax deduction scheme for rated retail bonds will be allowed to lapse after 31 December 2026.

Other schemes such as the Qualifying Debt Securities scheme and the Global-Asia Bond Grant Scheme continue to be available to bond issuers.