Login
In light of the global COVID-19 outbreak, a series of support measures have been introduced to help businesses and individuals ease their cash flow.
Support for Companies
An automatic deferral of Corporate Income Tax (C.I.T.) Payments has been implemented. All companies with C.I.T. payments due in the months of April, May and June 2020 were granted an automatic three-month deferral of payments. The C.I.T. payments that are deferred from April, May and June 2020 will be collected in July, August and September 2020 respectively.
Property Tax Measures
Non-residential properties will be granted property tax rebate for the period 1 January 2020 to 31 December 2020. Commercial properties badly affected by COVID-19, such as hotels, service apartments, tourist attractions, shops and restaurants, will receive a 100% property tax rebate. Other nonresidential properties such as offices and industrial properties will receive a 30% property tax rebate.
Enhanced Jobs Support Scheme (J.S.S.)
The J.S.S. will provide wage support to employers to help retain employees during this period of economic uncertainty. Eligible employers will receive a 75% cash grant (up from 8%) on the gross monthly wages of each local employee (Singapore Citizens and Permanent Residents), subject to a monthly wage cap of S$4,600 (approximately €2,975 at current exchange rates) per employee, for April and May 2020. Employers do not need to apply for the J.S.S.. The grant will be computed based on C.P.F. (similar to social security) contribution data.
I.R.A.S. Tax Guidance on circumstances arising out of the coronavirus
Tax residence status of a Company
Even if a company is not able to hold its board of directors meeting where strategic decisions are made in Singapore due to travel restrictions relating to COVID-19, I.R.A.S. may consider the company as a Singapore tax resident for assessment year 2021, provided it meets the following conditions:
- The company is a Singapore tax resident for assessment year 2020
- There are no other changes to the economic circumstances of the company and
- The directors of the company attend the board of directors meeting held outside Singapore or the meeting is held via electronic means because the directors are temporarily restricted in their travel as a consequence of COVID-19.
Conversely, where a company is not a tax resident of Singapore for assessment year 2020, I.R.A.S. will continue to consider the company as a non-resident for assessment yea 2021, provided it meets the following conditions:
- The company holds its Board of Directors meeting in Singapore due to the travel restrictions relating to COVID-19 and
- There are no other changes to the economic circumstances of the company.
To support the claim that the company should continue to be treated as a tax resident or nonresident of Singapore, the company should keep relevant documentations and records (e.g. board minutes stating why the directors were attending board meetings from their respective locations), and to provide the relevant information to I.R.A.S. upon request. Similarly, where a company is not a tax resident of Singapore for assessment year 2020, I.R.A.S. will continue to consider the company as non-resident for assessment year 2021, provided it fulfills specified conditions.
Permanent Establishment
According to published material on the I.R.A.S. website, if employees of foreign company remain in Singapore due to travel restrictions relating to COVID-19, I.R.A.S. may not consider such stay as creation of permanent establishment in Singapore, provided the conditions are met.
- The foreign company did not have a permanent establishment in Singapore for assessment year 2020
- There are no other changes to the economic circumstances of the company
- The unplanned presence of the employees in Singapore is due to travel restrictions relating to COVID-19 and their physical presence in Singapore is temporary, which, as a guide, means generally not more than 183 days in assessment year 2020 from the date of first arrival in Singapore
- The activities performed by the employees during the unplanned presence would not have been performed in Singapore if not for the travel restrictions.
To support the claim that there is no permanent establishment in Singapore, the company should keep relevant documentations and records, and to provide the relevant information to I.R.A.S. upon request.
Individuals
According to published material on the I.R.A.S. website, individuals exercising overseas employment but now working remotely from Singapore due to COVID-19, may not be considered as exercising an employment in Singapore, and not taxable in Singapore, provided the following conditions are met:
- The period of the extended stay is vor not more than 60 days and
- The work performed during the extended stay is not connected to the business assignment in Singapore and would have been performed overseas if not for COVID-19.
If all the conditions are met, the employment income for the period of your extended stay in Singapore will not be taxable. Note, however, that if an individual is given another business assignment relating to Singapore business during the extended stay, the employment income for the period of the whole stay in Singapore for both assignments will be subject to normal tax rules.
Enhanced financing support
The Singapore Government announced enhancements to existing schemes that were directed to locally owned small and medium size entities. This includes enhancements to exisiting Work Capital and Trade Finance Loans in amounts up to S$1m (approximately €647,000 at current exchange rates). The Temporary Bridging Loan Program (T.B.L.P.) was expanded to cover all sectors of the economy rather than solely focused on the tourism sector, as was previously the case. The maximum loan quantum was enhanced to S$5 million (approximately €63,237,000 at current exchange rates) per borrower group.