Deputy Prime Minister and Minister of Finance, Mr Lawrence Wong delivered the Singapore Budget Speech on 14 February 2023, with the theme of moving forward in a new era. This follows from the 2022 theme of charting a new way forward together. Amongst changes made were adjustments to the tax system to encourage R&D and innovation, as well as to recirculate wealth such as through tweaks made to Buyers’ Stamp Duty and tax on luxury cars. The key changes are set out below.

It was announced in Budget 2022 that the introduction of a Minimum Effective Tax Rate will be studied in response to the global minimum effective tax rate under the Pillar 2 Global Anti-Base Erosion rules of the BEPS 2.0 project. In Budget 2023, it has been confirmed that Singapore plans to implement the GloBE rules and Domestic Top-up Tax from businesses’ financial year starting on or after 1 January 2025. Businesses were assured that they will be engaged and provided with sufficient notice ahead of any rules becoming effective.
Enterprise Innovation Scheme
Tax measures under this scheme encourage businesses to engage in R&D, innovation and capability development activities. The Enterprise Innovation Scheme is available from Year of Assessment 2024 to 2028.
Enhancements
400% Tax Deduction for the first $400,000 of qualifying expenditure incurred for each Year of Assessment for the following:
- Staff Costs and Consumables Incurred on Qualifying R&D Projects Conducted in Singapore;
- Qualifying Intellectual Property (IP) Registration Costs;
- Qualifying Training Expenditure
400% Tax Deduction / Allowance for the first $400,000 of qualifying expenditure incurred for each Year of Assessment for:
- Acquisition and Licensing of Qualifying IP Rights, available to businesses that generate less than $500 million in revenue in the relevant Year of Assessment
Enhancements will be based on the conditions applicable to existing schemes.
Introduction
Tax Deduction of 400% for up to $50,000 of qualifying innovation expenditures incurred for each Year of Assessment will be introduced for Innovation Projects Carried Out with Polytechnics, the Institute of Technical Education (ITE) or Other Qualified Partners.
Cash payout
Subject to meeting conditions, eligible businesses have the option to apply for a non-taxable cash payout at a rate of 20% on up to $100,000 of total qualifying expenditure across all qualifying activities set out above (capped at $20,000 per Year of Assessment).
IRAS will provide further details of the changes by 30 June 2023.
Double Tax Deduction for Internationalisation (DTDi) Scheme
The DTDi Scheme which allows 200% tax deduction on qualifying activities, is in place till 31 December 2025. Enhanced to include a new qualifying activity “e- commerce campaign” and cover the following e-commerce campaign startup expenses paid to e-commerce platform/service providers:
- Advisory on market promotion and execution plans (e.g. choice of suitable e-commerce platforms)
- Assistance with setting up accounts on e-commerce platforms, and the right to sell on e-commerce platforms
- Design of e-commerce campaign publicity materials
- Product listing and placement
Prior approval is required from Enterprise Singapore. Approval will be granted for a maximum period of one year applied on a per-country basis.
For qualifying expenses incurred on or after 15 February 2023.
Enterprise Singapore will provide further details of the changes by 28 February 2023.
Option to Accelerate the Write-Off of the Cost of Acquiring Plant and Machinery
Irrevocable option to claim capital allowance over the following two years, with no deferral allowed once the claim is made in Year of Assessment 2024:
- 75% of the cost incurred in Year of Assessment 2024
- 25% of the cost incurred in Year of Assessment 2025
Option to Accelerate the Deduction for Renovation or Refurbishment Expenditure (R&R)
Businesses that incur qualifying expenditure on R&R may irrevocably opt for a one year claim (instead of over three consecutive years) under Section 14N in Year of Assessment 2024. The cap of $300,000 on qualifying expenditure for every relevant period of three consecutive years will still apply.
Supporting Charitable Works
Corporate Volunteer Scheme (CVS)
The Business & IPC Partnership Scheme (BIPS) will be renamed to the CVS with effect from 1 April 2023. Subject to conditions, a qualifying person enjoy 250% tax deduction on qualifying expenditure (e.g. basic wages) in respect of provision of services by / secondment of the person’s qualifying employee to an IPC.
Scope of qualifying volunteering activities will be expanded to include activities which are conducted virtually or outside of the IPC’s premises.
Quantum of qualifying expenditure per IPC per calendar year has been doubled to $100,000. Maximum claim per business per Year of Assessment remains at $250,000.
Due to lapse after 31 December 2023, the CVS has been extended to 31 December 2026.
Philanthropy Tax Incentive Scheme for Family Offices
For qualifying donors with Family Offices operating in Singapore. Donors must have a fund under MAS’ section 13O or 13U schemes and meet eligibility conditions such as incremental business spending of $200,000.
Qualifying donors can claim 100% tax deduction for overseas donations made through qualifying local intermediaries. Previously, tax deductions were not allowed on any donations made to overseas recipients.
Tax deduction is capped at 40% of the donor’s statutory income.
MAS will provide further details by 30 June 2023.
Enhancement and Refinement of Schemes
Qualifying Debt Securities (QDS) Scheme
Under the QDS Scheme, qualifying companies and bodies of persons in Singapore can enjoy 10% concessionary tax rate on qualifying income derived from QDS. Qualifying non-residents and individuals can enjoy tax exemption on qualifying income derived from QDS.
The following rationalizations were made:
- The scope of qualifying income will be streamlined to include all payments in relation to early redemption of a QDS.
- To qualify as QDS, the requirement that the QDS has to be substantially arranged in Singapore will be rationalized as follows:
- For all debt securities that are issued on or after 15 February 2023, they must be substantially arranged in Singapore by a financial institution holding a specified licence (instead of a FSI company)
- For Insurance-Linked securities (ILS) that are issued on or after 1 January 2024, if they are unable to meet the condition in a) above, at least 30% of the ILS issuance costs incurred by the issuer must be paid to Singapore businesses.
Due to lapse after 31 December 2023, the QDS Scheme has been extended to 31 December 2028.
MAS will provide further details by 31 May 2023.
Tax Incentive Scheme for Approved Special Purpose Vehicle (ASPV) Engaged in Asset Securitisation Transactions (ASPV scheme) and Introduce a New Sub-scheme to Support Covered Bonds
The ASPV scheme grants certain tax concessions to an ASPV engaged in asset securitization transactions. This includes GST recovery on its qualifying business expenses at a fixed rate of 76% which has been refined. Instead of a fixed rate of 76%, GST recovery rate will be the prevailing GST recovery rate/methodology accorded to licensed full banks under MAS for the specific year in question.
A new sub-scheme ASPV (Covered Bonds) will be introduced in relation to covered bonds defined in MAS Notice 648.
Due to lapse after 31 December 2023, the ASPV Scheme has been extended to 31 December 2028. ASPV (Covered Bonds) will take effect from 15 February 2023 to 31 December 2028.
MAS will provide further details by 31 May 2023.
Financial Sector Incentive (FSI) Scheme
The FSI scheme accords concessionary tax rates of 5%, 10%, 12% and 13.5% on income from qualifying banking and financial activities, headquarters and corporate services, fund managing and investment advisory services.
The existing concessionary tax rates will be streamlined to two tiers – 10% and 13.5% for new and renewal awards approved on or after 1 January 2024. Qualifying activities will be updated to ensure continued relevance.
Due to lapse after 31 December 2023, the FSI Scheme has been extended to 31 December 2028.
MAS will provide further details of changes by 31 May 2023.
Extensions and Withdrawals
Please refer to the Appendix for extensions and withdrawals of schemes.

Working Mother’s Child Relief (WCMR)
The WCMR is computed based on a percentage of a qualifying mother’s earned income.
This will be changed to a fixed dollar tax relief applied in respect of qualifying children who are Singapore citizens born or adopted on or after 1 January 2024. This change effectively provides more support to eligible lower to middle income working mothers.
Table 1: WMCR Amount Child Order |
WMCR Amount For a Singapore citizen child born or adopted before 1 January 2024 |
WMCR Amount For a Singapore citizen child born or adopted on or after 1 January 2024 |
1st | 15% of mother’s earned income | $8,000 |
2nd | 20% of mother’s earned income | $10,000 |
3rd and beyond | 25% of mother’s earned income | $12,000 |
There is no change to the WMCR for qualifying Singapore children born or adopted before 1 January 2024.
The total WMCR amount that an eligible working mother can claim for all her qualifying children will remain capped at 100% of the mother’s earned income for the Year of Assessment. The existing cap of $50,000 per child (WMCR plus Qualifying Child Relief / Handicapped Child Relief) will remain.
The change will take effect from Year of Assessment 2025 (i.e. for income earned in 2024).
Foreign Domestic Worker Levy Relief (FDWLR)
The FDWLR will lapse for all taxpayers with effect from Year of Assessment 2025.
Grandparent Caregiver Relief (GCR)
GCR of $3,000 has been enhanced such that it is available for working mothers who engage the help of parents, grandparents, parents-in-law or grand parents- in-law to take care of their young children as long as the caregiver does not have annual trade, business, vacation and/or employment income (activities) exceeding $4,000. Previously, one of the conditions was that the caregiver could not carry on such activities. All other conditions remain.
The change will take effect from Year of Assessment 2024.

Raise Buyer’s Stamp Duty (BSD) for Higher Value Residential and Non- residential Properties
Current transactions in residential and non-residential properties are subject to marginal BSD rates of 1% to 4% and 1% to 3% respectively.
For residential and non-residential properties, the new marginal BSD rates are as indicated in the table below and will apply to all properties acquired on or after 15 February 2023.
There will be transitional provisions where the BSD rates on or before 14 February 2023 will apply for cases that meet specified conditions.
Higher of Purchase Price or Market Value of the Property | Marginal BSD Rate | |
Residential Property | Non-residential Property | |
First $180,000 | 1% | 1% |
Next $180,000 | 2% | 2% |
Next $640,000 | 3% | 3% |
Next $500,000 | 4% | 4% (New) |
Next $1,500,000 | 5% (New) | 5% (New) |
Amount exceeding $3,000,000 |
6% (New) |
Vehicular tax changes
Vehicle taxes have been adjusted and made more progressive. Effectively the Additional Registration Fee (ARF) rates have been adjusted such that higher-end luxury cars are subject to higher ARF.
Preferential ARF (PARF) rebates are capped at $60,000.
PARF rebates are enjoyed by owners of cars and taxis that are deregistered subject to meeting certain conditions. The PARF rebates are calculated based on a percentage of the ARF paid, subject to the age of the car (or taxi) upon deregistration. Although ARF rates have been increased, the $60,000 cap avoids providing excessive PARF rebates to more expensive cars upon their deregistration.
Further details will be announced by the LTA.

Senior Worker CPF contribution rates will be increased (from 1 January 2024) and so will the Minimum CPF monthly payouts for Seniors on the Retirement Sum Scheme (from 1 June 2023). CPF monthly salary ceiling will also be raised from $6,000 to $8,000 in four steps, by 2026.

Extensions
250% Tax Deduction for Qualifying Donations to IPCs and Eligible Institutions
Due to expire on 31 December 2023. Extended to 31 December 2026
Investment Allowance Scheme
The IA Scheme provides for additional tax allowances on qualifying fixed capital expenditure on approved projects.
Due to expire on 31 December 2023. Extended to 31 December 2028
IA-100% for Automation Projects
The IA 100% for Automation Projects is for approved capital expenditure on automation projects.
Due to expire on 31 March 2023. Extended to 31 March 2026
Pioneer Certificate (PC) and Development and Expansion Incentive (DEI)
Both incentives encourage companies to conduct new / expanded economic activities and establish their global or regional HQ in Singapore.
Due to expire on 31 December 2023. Extended to 31 December 2028.
IP Development Incentive (IDI)
IDI supports companies that use and commercialise IP rights arising from R&D in Singapore.
Due to expire on 31 December 2023. Extended to 31 December 2028.
Tax Exemption on Income Derived by Primary Dealers from Trading in Singapore Government Securities
Due to expire on 31 December 2023. Extended to 31 December 2028.
Insurance Business Development – Insurance Broking Business Scheme (IBD-IBB)
The scheme grants approved insurance and reinsurance brokers a concessionary tax rate of 10% on commission and fee income derived from insurance broking and advisory services.
Due to expire on 31 December 2023. Extended to 31 December 2028.
Tax Concession for Deduction of General Provisions for Doubtful Debts and Regulatory Loss Allowances Made in Respect of Non-credit impaired Financial Instruments for Banks (Including Merchant Banks) and Qualifying Finance Companies
Due to lapse after Year of Assessment 2024 (for Dec FYE) and Year of Assessment 2025 (for non-Dec FYE). Extended to Year of Assessment 2029 and Year of Assessment 2030 respectively.
Three Tax Measures Relating to Submarine Cable Systems
The WHT exemption for payments to non-residents for the use of IRUs, writing down allowances and / or IA on IRUs were due to lapse on 31 December 2023. Extended to 31 December 2028.
Withdrawals
Tax Deduction for Expenditure Incurred on Building Modifications for Benefit of Disabled Employees
The scheme will be withdrawn from 15 February 2023.
Important Note: This publication serves as a broad guide and is not to be relied upon to cover specific circumstances. Persons should not act upon the information contained therein without obtaining specific professional advice.