SINGAPORE Trends and Developments Contributed by: Lee Woon Shiu and Cheung Kuan Swan (Catherine), DBS Private Bank
Goods and Services Tax (GST) GST in Singapore has undergone a phased increase. It rose from 7% to 8% on 1 January 2023 and further to its current rate of 9% on 1 January 2024. This 9% rate is the GST for Singapore in 2026 and is applied to most goods and services supplied within or imported into the country. These tax adjustments are aimed at supporting busi - nesses and individuals operating in Singapore. Tax incentive schemes Singapore employs a broad array of tax incentive schemes to strengthen its economic position and attract global investment. Several such incentives, playing a pivotal role in supporting high-value indus - tries, fostering innovation and encouraging entrepre - neurship, have been extended and enhanced. For economic growth Key schemes include the Pioneer Service Incentive (PSI) and Development and Expansion Incentive (DEI), which offer tax exemptions or concessions to com - panies driving industrial development and economic growth, particularly in advanced manufacturing, tech - nology and analytics. To promote innovation and research, the government provides generous research and development (R&D) tax deductions and allowances, which can be up to 300% for qualifying expenditures, benefiting sectors such as AI, robotics, biotechnology and clean energy. The Intellectual Property Development Incentive (IDI), aimed at supporting businesses and stimulating com - mercialisation of IP, offers reduced tax rates for quali - fying intellectual property income. The Start-Up Tax Exemption (SUTE), designed to encourage entrepreneurial growth, exempts the first SGD200,000 of a start-up’s income from tax in its initial three years. This helps start-ups reinvest and expand, especially in digital media, e-commerce and fintech. The Financial Sector Incentive (FSI) scheme helps Singapore maintain its global financial hub status by offering lower tax rates to eligible financial institutions, including fund managers. The FSI-Fund Management
Listing provides a 5% tax rate for fund managers list - ing on the Singapore Exchange, while the FSI-Fund Management Singapore Equities scheme grants a full tax exemption for managers investing in Singapore equities. This helps to support the local capital mar - kets and encourage listings in Singapore. The Maritime Sector Incentive (MSI) boosts Sin - gapore’s maritime industry with tax exemptions or reduced rates for companies in international shipping, maritime leasing and related services that establish or expand operations locally. Biomedical science incentives encourage growth in pharmaceuticals, biotechnology and medical technol - ogy by offering enhanced support for clinical trials, specialised facilities like Biopolis and up to 250% tax deductions on R&D expenses incurred in Singapore, attracting foreign investment and innovation. These industry-specific incentives, whether through a lower tax rate or attractive tax deductions, aim to draw foreign investment, promote high-value activities and strengthen Singapore’s global competitiveness. For growth in the family office and wealth management space The Finance and Treasury Centre (FTC) incentive, a Singapore Economic Development Board (EDB) initia - tive designed to encourage companies to use Singa - pore as a regional base for treasury, finance and risk management activities, has been extended until 31 December 2031. Approved FTC companies can ben - efit from a reduced corporate tax rate of 8% or 10% on qualifying income and withholding tax exemptions on interest payments. The two most-used tax exemption schemes adminis - tered by the Monetary Authority of Singapore (MAS) in a single-family office (SFO) based structure set-up in Singapore, namely the Enhanced-Tier Fund Tax Incentive Scheme (S13U) and Resident Fund Tax Incentive Scheme (S13O) under the Income Tax Act (S13U and S13O; collectively the “Schemes”), offer tax exemptions on specified income from designated investments to encourage onshore fund management and family office growth. The Schemes, intended to attract and retain “high-quality” capital that delivers
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