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Deloitte’s Suggestion For The Singapore Budget 2024 Involves Restructuring Singapore’s System Of Tax Incentives And Grants

Muammar

IBX-Jakarta. Deloitte’s advice concerning the Singapore Budget 2024 revolves around the suggestion to overhaul Singapore’s tax incentives and grants structure, as reported by The Edge Singapore. This suggestion stems from the upcoming significant changes in international tax regulations proposed by the Organisation for Economic Co-operation and Development (OECD), aimed at addressing tax avoidance. With the impending implementation of the Global Anti-Base Erosion Rules (GloBE), which impose a 15% tax on large multinational corporations regardless of their operating location, Deloitte proposes reshaping Singapore’s tax incentives and grants regime. They advocate for the introduction of new fiscal subsidies, such as refundable tax credits, to ensure Singapore’s tax incentives continue to promote an investment-friendly environment, as stated in their Dec 26 announcement.
The focus is directed towards Section 10L of the Income Tax Act 1947, an upcoming legislation effective from 2024 that aligns Singapore’s regulations with international standards for taxing profits from the sale of foreign assets, particularly following guidelines from Conduct Group’s EU code. Loh Eng Kiat, a tax partner at Deloitte Singapore, expressed, “Our recommendation aims not only to address the initial challenges expected with the introduction of a new law but also to optimize the use of economic substance requirements to achieve favorable tax outcomes.”
Aligned with this approach, Deloitte proposes deferring the collection of income tax while transferring foreign assets between related Singapore entities in internal group restructuring scenarios as a strategy to alleviate fiscal pressures. Moreover, the anticipation of new incentive mechanisms, like Qualified Refundable Tax Credits (QRTCs), is highlighted. Yvaine Gan, the global leader for investment and innovation incentives at Deloitte Singapore, stresses that well-crafted and properly executed QRTCs could significantly aid businesses while complying with commitments to fair minimum tax rates. Ms. Gan commented, “These proactive measures underscore our commitment to establishing a balanced and resilient economic framework, allowing Singapore to confidently navigate the intricacies of the global economic landscape while fostering sustainable growth and inclusivity.”
Deloitte also extends its recommendations to encompass green financing within the budget, aligning with concerns about sustainability and climate change. The firm advocates strategies that promote eco-friendly business practices and expedite investments in renewable energy. Additionally, Deloitte’s recommendations underscore the significance of advancing Singapore’s goal of becoming a premier financial services hub in Asia, an attractive destination for global talent, and the government’s focus on addressing societal needs.
Source: Deloitte’s recommendation on SG Budget 2024: Reshape SG’s tax incentives and grants regime (msn.com)
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