SINGAPORE - The Ministry of Finance has accepted several suggestions from members of the public to be incorporated into the amended Income Tax Act.
These include a suggestion to allow a company to qualify for the double tax deduction for internationalisation scheme if the manpower expenses incurred by its overseas entity is recharged back to the Singapore entity.
Currently, it is not clear if such recharges will be allowed to qualify. The Finance Ministry will revise the Act to clarify that the Singapore entity will be treated as having incurred the salary expenditure whether it directly pays these expenses or reimburses its overseas entity for them.
The Finance Ministry also accepted a suggestion to amend the definition of "international growth company" in the International Growth Scheme. The scheme serves to support Singapore companies to expand overseas while anchoring their key business activities and headquarters in Singapore. The current definition will be revised to include a company, set up and located in Singapore, which provides services to a person or permanent establishment outside Singapore.
In all, the ministry received 70 suggestions on its proposals during the public consultation exercise held from June 26 to July 24. Of these, 31 have been accepted and revisions will be made to the draft Income Tax (Amendment) Bill 2016, the ministry said.
The remaining suggestions were not accepted as they were inconsistent with either the legislative drafting conventions or the policy objectives of the proposed legislative changes, it added. These included suggestions about the tax changes on extending and refining the schemes on mergers and acquisitions as well as the maritime sector incentive.