Budget Speech
ANNEX D: Tax Measures to Promote Entrepreneurship
and Growth of Singapore Companies
Concession for Enterprise Development
Businesses that incur expenses before trade revenue
is earned may not be able to claim a tax deduction for these expenses.
To promote enterprise, the first day of the accounting
year in which a business earns its first dollar of trade revenue
will be regarded as the point at which the business starts trading.
This administrative concession will provide businesses with greater
certainty about the deductibility of their expenses.
This concession will take effect from YA 2004. Businesses
will benefit from tax deductions for all revenue expenses incurred
during that accounting year. If a business is able to prove that
it started trading and incurred revenue expenses even earlier, it
will continue to be allowed to deduct these expenses as well.
Revised Overseas Investment Incentive
Currently, the Overseas Investment Incentive allows
an approved Singapore company to deduct losses arising from the
sale of shares or liquidation of an approved overseas investment
against its statutory income.
To help our companies expand overseas, this incentive
has been revised to allow an approved Singapore-based company to
defer its income taxes for two years if its approved overseas investment
incurs operating losses during the first three years of the approved
investment. The revamped incentive will cover new investments made
from 1 January 2004.
International Enterprise Singapore (IES) will
release further details by July 2003.
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