Income Tax Act changes effective from various dates to implement tax changes announced in 2022 Budget Statement

29 November 2022

On 4 November 2022, the Income Tax (Amendment) Act 2022 (“Amendment Act”) was gazetted with its provisions coming into operation on various dates. The Amendment Act amends the Income Tax Act 1947 (“ITA”) to implement tax changes announced in 2022 Budget Statement as well as non-Budget 2022 amendments arising from the periodic review of the income tax regime.

A brief summary of some of these changes is set out below:

  • Personal income tax of tax-resident and non tax-resident individual taxpayers: The top marginal personal income tax (“PIT”) rate of tax-resident individuals will be increased from the Year of Assessment 2024. The portion of chargeable income in excess of S$500,000 up to S$1 million will be taxed at 23%, while that in excess of S$1 million will be taxed at 24%; both up from 22% currently. The PIT rates for certain income by non-tax-resident individuals that are pegged to the top marginal tax rate of tax-resident individuals will also be revised to 24%.
  • Facilitate disclosure of company-related information for official duties: To support data-driven policymaking, operations and integrated service delivery, amendments will be made to the ITA and Goods and Services Tax Act 1993 to facilitate the disclosure of information by the Inland Revenue Authority of Singapore for official duties.
  • Definition of “local employee” updated: The definition of “local employee” for the Mergers and Acquisitions Scheme has been updated to recognise individuals hired under central hiring and secondment arrangements as employees of the acquiring company. Previously, only individuals directly hired by the acquiring company were taken into account for assessing whether the three local employee condition was met.
  • Update provisions relating to the Board of Review: The provisions relating to the Board of Review (“BOR”), which is a tribunal set up under the ITA to hear and adjudicate tax disputes between the Comptroller and taxpayers, will be updated and streamlined by removing outdated references, clarifying the Minister’s regulation-making powers regarding tax appeals and the case management powers of the BOR, and moving BOR provisions on procedures to subsidiary legislation. Further, the Chairperson will be allowed to have the option to convene a one-member coram where appropriate.

Reference materials

The Income Tax (Amendment) Act 2022 is available from Singapore Statutes Online sso.agc.gov.sg.