In Budget 2025, the Singapore government announced measures to support businesses by easing cash flow pressures and providing financial relief. One of the key highlights is the Corporate Income Tax (CIT) Rebate and the CIT Rebate Cash Grant, which aim to help companies manage their tax obligations while encouraging local employment. Here’s what you need to know about these initiatives and how they can benefit your business.
Key Highlights of the CIT Rebate and CIT Rebate Cash Grant
CIT Rebate of 50% for YA 2025
All taxpaying companies, whether tax resident or non-resident, will receive a CIT Rebate of 50% of their corporate tax payable for the Year of Assessment (YA) 2025.
This rebate is capped at $40,000 per company.
The CIT Rebate applies to income taxed at concessionary tax rates but excludes income subject to final withholding tax.
CIT Rebate Cash Grant for Smaller Companies
Active companies that have employed at least one local employee in 2024 (referred to as the “local employee condition”) will receive a minimum benefit of $2,000 in the form of a CIT Rebate Cash Grant.
The total combined benefits of the CIT Rebate and CIT Rebate Cash Grant are capped at $40,000 per company.
Eligibility Criteria
1. CIT Rebate
All taxpaying companies are eligible for the CIT Rebate, regardless of whether they are tax residents or non-residents.
The rebate will be automatically computed by IRAS based on the company’s filed Estimated Chargeable Income (ECI) or Corporate Income Tax Returns (Form C/ Form C-S/ Form C-S (Lite)).
2. CIT Rebate Cash Grant
To qualify for the CIT Rebate Cash Grant, a company must meet the following conditions:
Active Company: The company must be actively carrying on a trade or business at the time of disbursement. Inactive companies, such as those under liquidation, receivership, or amalgamation, are excluded.
Local Employee Condition: The company must have made CPF contributions to at least one local employee (Singapore citizen or permanent resident) in 2024. Shareholders who are also directors are excluded from this count.
Additionally, companies with centralised hiring or secondment arrangements may also qualify if they meet specific conditions, such as:
Providing supporting documents for the work arrangement and recharging of employment costs.
Ensuring the corporate structure and hiring practices are for bona fide commercial reasons.
Key Deadlines and Disbursement
The CIT Rebate will be automatically computed and reflected in the company’s YA 2025 tax assessment based on the ECI or Corporate Income Tax Returns filed.
The CIT Rebate Cash Grant will be disbursed to eligible companies by the second quarter of 2025.
What Businesses Need to Do
Ensure Compliance with Local Employee Condition
Verify that your company has made CPF contributions to at least one local employee in 2024.
Maintain proper records of employment and CPF contributions.
File Accurate ECI and Corporate Tax Returns
Ensure that your company’s Estimated Chargeable Income (ECI) and Corporate Income Tax Returns (Form C/ Form C-S/ Form C-S (Lite)) are filed accurately and on time.
Stay Updated on Disbursement
Monitor your company’s tax assessments and look out for the CIT Rebate Cash Grant disbursement in Q2 2025.
Conclusion
The CIT Rebate and CIT Rebate Cash Grant introduced in Budget 2025 provide much-needed support for businesses, especially smaller companies, to manage their cash flow and tax obligations. By understanding the eligibility criteria and taking the necessary steps to comply, your business can maximize the benefits of these initiatives.
If you have any questions or need assistance with your corporate tax filings, feel free to reach out to Astab. Our team of experts is here to help you navigate the complexities of tax compliance and ensure your business thrives in 2025 and beyond.
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