MOF consults on 22 legislative amendments regarding Budget 2026, Tax Administration, and GloBE Rules

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© RAJAH & TANN SINGAPORE LLP

TAX

MOF Consults on 22 Legislative

Amendments Regarding Budget 2026, Tax

Administration, and GloBE Rules

Introduction

On 8 June 2026, the Ministry of Finance ("MOF") announced a public consultation on the proposed

Finance (Income Taxes) Bill 2026 ("Bill"). The Bill covers 22 proposed amendments to the Income

Tax Act 1947 ("ITA") and the Multinational Enterprise (Minimum Tax) Act 2024 ("MMTA") as follows:

1. Ten amendments to the ITA to implement the tax measures announced at Budget 2026, which aim to (i) support businesses and workers; (ii) strengthen Singapore as a business and philanthropy hub; and (iii) encourage giving and volunteerism.

2. Ten amendments to the ITA regarding changes arising from MOF's periodic review of Singapore's income tax system, which aim to support taxpayers and improve tax administration.

3. Two amendments to the MMTA relating to the Pillar Two Global Anti-Base Erosion ("GloBE")

Model Rules to implement the Side-by-Side Safe Harbour and the GloBE information return exchange framework.

Below, we discuss the details of the proposed amendments to the ITA and MMTA.

The consultation closes on 1 July 2026.

Amendments to Implement Budget 2026 Measures

Supporting Businesses and Workers

Tax Change

Details

Relevant Dates

Enhancement to Enterprise

Innovation Scheme ("EIS")

•

The EIS allows for 400% tax deductions on qualifying expenditure carried out with partner institutions.

•

A new qualifying activity for artificial intelligence ("AI") expenditure will allow 400%

deductions on up to S$50,000 per YA, without a cash payout option.

Enhanced for years of assessment ("YA") 2027

and YA 2028.

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Tax Change

Details

Relevant Dates

•

The list of partner institutions will be expanded to include the Sectoral AI Centre of Excellence for Manufacturing. However, no legislative amendments will be made to implement this as the Sectoral AI Centre of Excellence for

Manufacturing already meets the definition of an “approved educational or research institution”.

50% Corporate Income Tax

Rebate in YA 2026

•

A 50% rebate of tax payable will be provided in

YA 2026.

•

Eligible active companies with at least one local employee in calendar year 2025 will receive at least S$2,000.

•

The total maximum benefit a company can receive is S$40,000.

Rebate provided in YA

2026

Enhancement to Double

Tax Deduction for

Internationalisation scheme

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The cap for claims without prior approval will increase from S$150,000 to S$400,000 per

YA.

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The expanded scope will cover overseas market development and investment study trips, as well as specified feasibility, licensing, market survey, business development and brochure costs.

Applies from YA 2027

Tax deduction for Central

Provident Fund ("CPF")

cash top-ups made by platform operators on behalf of platform workers

Platform operators may claim deductions for CPF cash top-ups made for eligible platform workers under the Voluntary Contributions to MediSave

Account scheme, aligning with the tax treatment for top-ups made by employers.

Applies from YA 2027 to top-ups made on or after 1 January 2026

Strengthening Singapore as a Business and Philanthropy Hub

Tax Change

Details

Relevant Dates

Extension and enhancement of Global

Trader Programme

The Global Trader Programme will be extended.

Extended until 31

December 2031

Qualifying commodities will also include

Environmental Attribute Certificates.

Applies from 13 February 2026

Extension and enhancement of Finance and Treasury Centre incentive

The Finance and Treasury Centre incentive will be extended.

Extended until 31

December 2031

The withholding tax exemption will also expand to cover interest-like borrowing costs for loans used for qualifying activities or services.

Applies to payments made on or after 13

February 2026

Extension of withholding tax exemptions for the financial sector

This applies to:

•

the exemption for payments on structured products made to non-individual non-resident persons.

•

the waiver of withholding obligations on certain section 12(6) payments, such as interest and loan-related payments.

Extended until 31

December 2031

Extension of Not-for-Profit Organisation Tax

Incentive

The Not-for-Profit Organisation Tax Incentive will be extended.

Extended until 31

December 2032

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Encouraging Giving and Volunteerism

Tax Change

Details

Relevant Dates

Extension of 250% tax deduction for qualifying donations

Extended to qualifying donations made from 1 January 2027 to 31 December 2029.

1 January 2027 to 31

December 2029

Extension of Corporate

Volunteer Scheme

The 250% deduction will be extended to qualifying expenditure incurred from 1 January 2027 to 31

December 2029.

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Businesses may claim deductions on qualifying expenditure, such as wages, for sending or seconding qualifying employees to Institutions of a

Public Character ("IPC").

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Qualifying expenditure is capped annually at

S$250,000 per business per YA and S$100,000

per IPC per calendar year.

1 January 2027 to 31

December 2029

For more details on Budget 2026, please see our February 2026 Legal Update titled "Singapore

Budget 2026: Securing Our Future Together in a Changed World".

Amendments Arising from Periodic Review

The proposed amendments arising from MOF's periodic review aim to support taxpayers and improve tax administration.

Supporting Taxpayers

Tax Change

Details

Relevant Dates

Expansion of Maritime

Sector Incentive –

Approved International

Shipping Enterprise award

Expanded to cover Singapore-flagged ships. Shipping groups with this incentive will therefore only need to tap on one incentive for all their ships.

From YA 2027 20% Fixed Expense

Deduction Ratio

("FEDR") for self-employed persons and individual sole proprietors

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A 20% FEDR will apply to eligible self-employed persons and sole proprietors with revenue of up to S$50,000 for income not already covered by existing industry-specific FEDRs.

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Eligible taxpayers may elect to claim this ratio instead of actual expenses.

Tax exemption for employer-subsidised childcare benefits

Extended to include MOE Kindergartens.

Tax exemption for payments under the

ComLink+ Package for

Employment

Exemption applies to payments made on or after 1

May 2025.

From 1 May 2025

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Administrative Measures

Tax Change

Details

Relevant Dates

Mandatory use of IRAS' e-service for objections and revisions to tax assessments

Companies will be required to use IRAS' e-service to file objections and revisions to submitted corporate income tax returns.

From 1 July 2027

Requirements for bodies of persons

To ensure consistency in tax treatment across different types of business entities, the following requirements that currently apply to companies will be extended to bodies of persons:

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Requirement to apportion deductions for certain qualifying donations among different tax rates.

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Requirement to adjust unabsorbed allowances, losses or donations relating to income taxed at a lower rate before deducting it against income taxed at a higher rate.

Power to revoke certain tax incentives for sovereign fund entities, foreign government-owned entities and international organisations

The Minister or an authorised body will be empowered to revoke these tax incentives if conditions are not met, in line with the revocation powers applicable to other tax incentives.

From gazette date

Appeal timeline for Board of Review decisions

A standardised appeal timeline of 28 days will apply for appeals to the General Division of the High Court.

From gazette date

Notice period for Board of

Review hearings

The notice period for hearings before the relevant

Boards of Review will be extended from 14 days to 35

days.

From gazette date

Amendments Relating to GloBE Rules

Tax Change

Details

Relevant Dates

Implement the Side-by-Side Safe Harbour

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The Side-by-Side Safe Harbour effectively exempts the income of multinational enterprise

("MNE") groups, which are headquartered in a jurisdiction with a qualified side-by-side regime, from the application of the Income Inclusion Rule and the Undertaxed Profits Rule in other jurisdictions.

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Legislative amendments to implement the Side-by-Side Safe Harbour will apply to MNE groups for financial years beginning on or after 1 January 2026.

Will apply to financial years beginning on or after 1 January 2026

Implement the GloBE information return exchange framework

The legislative amendments will:

1. allow Singapore to exchange relevant GloBE information with other tax administrations;

2. require MNE groups to file GloBE information returns with the Inland Revenue Authority of

From gazette date

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Tax Change

Details

Relevant Dates

Singapore ("IRAS") if IRAS does not receive such information from the relevant tax administration within the stipulated deadlines;

and

3. apply existing penalties for non-compliance and inaccurate filings to such filings in (2).

Click on the following links for more information (available on the MOF website at https://www.mof.gov.sg/home):

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MOF page titled "Public Consultation on Proposed Finance (Income Taxes) Bill 2026"

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Full text of the Bill

If you have any queries on the above, please reach out to our team set out on this page.

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