A BUDGET FOR THE FUTURE. Budget at a glance

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1 A BUDGET FOR THE FUTURE Budget at a glance

2 Sector Specific Financial and insurance sectors Tax framework for Singapore Variable Capital Companies ( S-VACCs ) to be introduced to complement the S-VACC regulatory framework Tax exemption under the Enhanced-Tier Fund Scheme to be extended to all qualifying fund vehicles Tax transparency treatment for Singapore-listed REITs to be extended to Singapore-listed REITs Exchange Traded Funds Tax incentive scheme for Approved Special Purpose Vehicle engaged in asset securitisation to be extended to 31 December 2023 Financial Sector Incentive Scheme to be enhanced and extended to 31 December 2023 Tax deduction for qualifying financial institutions for impairment and loss allowances made in respect of non-credit-impaired financial instruments to be extended Withholding tax exemptions for the financial sector to be rationalised Insurance Business Development Insurance Broking Business scheme to be extended to 31 December 2023 and Specialised Insurance Broking Business scheme to lapse after 31 March 2018 Qualifying Debt Securities incentive scheme to be extended till 31 December 2023 and Qualifying Debt Securities Plus incentive scheme to lapse after 31 December 2018 Tax exemption on income derived by primary dealers from trading in Singapore Government Securities to be extended to 31 December 2023

3 Sector Specific Infrastructure sector Investment Allowance scheme to include qualifying investment in submarine cable systems landing in Singapore New office to connect infrastructure demand in Asia to infrastructure financing, services and expertise Real estate sector Top marginal Buyer s Stamp Duty rate will be raised from 3% to 4%. Applicable to residential property acquired on or after 20 February 2018, that is valued in excess of $1 million Shipping and marine sectors Increase in Foreign Workers Levy rates deferred for the Marine Shipyard and Process sectors to 30 June 2018 Introduction of 31 December 2022 as the review date for the withholding tax exemption on container lease payments made to non-resident lessors

4 Businesses Corporate Income Tax ( CIT ) rebate enhanced and extended: For YA 2018, CIT rebate raised to 40% of tax payable, capped at $15,000 CIT rebate extended to YA 2019, at a rate of 20% of tax payable, capped at $10,000 Thresholds for Start-up Tax Exemption and Partial Tax Exemption schemes reduced to first $200,000 Wage Credit Scheme extended for three more years to 2020, with government co-funding of qualifying wage increases at 20% for 2018, 15% for 2019 and 10% for 2020 Up to 70% funding support for the adoption of pre-scoped, off-the-shelf solutions to improve productivity Up to 70% funding support for firms to build a range of capabilities including innovation, talent development and internationalisation Funding support for collaborations and partnerships between firms of all sizes Double Tax Deduction for Internationalisation enhanced with an increase in the expenditure cap for claims without prior approval from $100,000 to $150,000 per year of assessment Tax deduction for the first $100,000 of qualifying Intellectual Property ( IP ) licensing costs or qualifying IP registration costs raised to 200% Tax deduction for staff costs and consumables incurred on qualifying R&D projects performed in Singapore raised from 150% to 250%

5 Goods & Services Tax ( GST ) GST rate to be increased from 7% to 9%, sometime between 2021 and 2025 GST will be introduced on Business-to-Business and Business-to-Consumer imported services on or after 1 January 2020

6 Individuals All Singaporeans aged 21 and above in 2018, will receive a one-off SG Bonus of $100 to $300, with the quantum dependent on annual income thresholds GST Vouchers to be enhanced for eligible households and seniors

7 Environment & Society From 2019, there will be a new carbon tax of $5 per tonne of greenhouse gas emissions, for all facilities producing 25,000 tonnes or more in annual greenhouse gas emissions. There are plans to increase the tax to between $10 and $15 per tonne of emissions by 2030 Grants and support to help companies enhance energy efficiency and reduce emissions Excise duties raised by 10% across all tobacco products Enhanced 250% tax deduction for qualifying donations extended, for donations made on or before 31 December % tax deduction on qualifying costs incurred for businesses that support staff to volunteer and provide services to Institutions of a Public Character ( IPC ) under Business and IPC Partnership Scheme

8 kpmg.com.sg CONTACT US KPMG 16 Raffles Quay #22-00 Hong Leong Building Singapore T: F: E: Ranked Tier 1 Firm in Singapore World Tax and World Transfer Pricing 2018, International Tax Review Asia Tax Firm of the Year Asia Tax Awards 2017 & 2018, International Tax Review Best Advisor in Real Estate Tax Globally Real Estate Awards 2017, EuroMoney kpmg.com/socialmedia kpmg.com/app 2018 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in Singapore. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.