Singapore Budget 2023: key tax updates

In brief

Budget 2023 focuses on building a more resilient and innovative Singapore. As the country emerges from the Covid-19 pandemic, the nation now contends with inflationary pressures in the midst of global uncertainty. Budget 2023 seeks to provide support to businesses and households to weather the challenges ahead while ensuring that Singapore continues to uphold fiscal prudence.

Importantly, the government has announced its intention to implement the OECD Pillar 2 measures from 2025 and confirmed that it will implement a domestic top-up tax which will top up multinational enterprise groups' effective tax rate in Singapore to 15%. To remain competitive, Singapore will retain and extend its major tax incentives. Changes have also been made to buyer's stamp duty rates, which are consistent with enhancing the fairness and resilience of Singapore's tax system.

We highlight below the key tax developments from Budget 2023.


Key takeaways

  • Singapore plans to introduce the Global Anti-Base Erosion rules (i.e., Income Inclusion Rule and Undertaxed Profits Rule) and domestic top-up tax from in-scope businesses' financial year starting on or after 1 January 2025. The domestic top-up tax will top up the multinational enterprise groups' minimum effective tax rate in Singapore to 15%. 
  • There will be extensions and enhancements to various tax schemes, including the Pioneer Certificate Incentive, Development and Expansion Incentive, Investment Allowance scheme, Qualifying Debt Securities scheme and Financial Sector Incentive scheme.
  • A new Enterprise Innovation Scheme will be introduced to encourage businesses to engage in research and development, innovation and capability developments activities. Under this scheme, qualifying expenditure incurred on qualifying activities will be eligible for tax deductions or allowances of up to 400% but will generally be subject to a cap of $400,000. Businesses may also opt for a non-taxable cash payout of 20% on up to $100,000 of total qualifying expenditure across all qualifying activities per year of assessment, in lieu of tax deductions or allowances.
  • Higher marginal buyer's stamp duty rates have been introduced for higher-value residential and non-residential properties. With effect from 15 February 2023, the buyer's stamp duty rates are up to 6% for residential properties and 5% for non-residential properties.

Click here to access full alert.




© 2023 Baker & McKenzie.Wong & Leow. All rights reserved. Baker & McKenzie.Wong & Leow is incorporated with limited liability and is a member firm of Baker & McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "principal" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

Contact Information

Copyright © 2023 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.