As outlined in Budget 2024, the government has introduced measures to help businesses manage rising expenses. For the Year of Assessment (YA) 2024, all companies, whether tax-resident or not, will receive a 50% CIT Rebate on their corporate tax payable. Additionally, companies that employed at least one local employee in 2023 (meeting the “local employee condition”) will qualify for a cash payout, referred to as the CIT Rebate Cash Grant, valued at $2,000. Together, these benefits guarantee eligible companies a minimum of $2,000, with a combined cap of $40,000 across both incentives.
CIT Rebate Cash Grant
The CIT Rebate Cash Grant specifically supports smaller companies that may otherwise benefit minimally, or not at all, from the CIT Rebate. To qualify, companies must fulfill the local employee condition, meaning they must have made CPF contributions in 2023 to at least one local employee (Singapore Citizen or Permanent Resident), excluding any shareholders who are also directors. Eligible companies, regardless of tax residency status, will automatically receive the CIT Rebate Cash Grant by 25 August 2024. Registered business trusts and variable capital companies meeting this local employee condition are also included. This grant is non-taxable.
For companies using a central hiring or secondment model to meet the local employee condition, local employees may include those deployed to the company under such arrangements, provided:
- The company can show documentation of recharged employment costs for 2023 by a related entity, demonstrating that the employee worked exclusively for the company during that period.
- The company’s corporate structure and hiring practices are for valid commercial reasons.
- The employee does not count toward the headcount of the entity that initially incurred the manpower costs.
Examples of Central Hiring Models Include:
- Centralized HR Allocation: A single entity manages HR for a group, recharging employee costs (including CPF contributions) to respective entities.
- Employee Secondment: Staff are seconded to work in a related company, with their costs fully recharged to that company.
If your company meets the local employee condition through centralized hiring or secondment and has not received the CIT Rebate Cash Grant by Q3 2024, you may submit an appeal through myTaxMail by 30 November 2024. Include “Appeal for CIT Rebate Cash Grant” in the subject and attach supporting documents detailing the arrangement and cost recharging.
CIT Rebate
The 50% CIT Rebate applies to income taxed at concessionary rates but excludes income subject to final withholding tax. Business trusts and variable capital companies also qualify for this rebate.
When filing Corporate Income Tax Returns (ECI and Form C-S/C-S Lite/Form C), companies should exclude the CIT Rebate in their chargeable income. IRAS will automatically compute and apply the CIT Rebate in each company’s YA 2024 tax assessment based on the submitted return. For final assessments impacted by these tax changes (e.g., advance assessments), IRAS will issue amended notices by 31 August 2024.
These initiatives offer timely financial relief to companies navigating cost pressures and emphasise support for companies of all sizes through equitable tax relief and cash grants.