In light of the global COVID-19 outbreak, a series of support measures have been introduced to help businesses and individuals to ease their cash flow. During this period of uncertainty, IRAS(Inland Revenue Authority of Singapore) continues to extend its assistance and provide tax certainty to taxpayers. IRAS have set out the following tax guidance for taxpayers who may be affected by the COVID-19 developments. Visit COVID-19 Support Measures and Tax Guidance for more information.
If tax payers are facing difficulties in paying the taxes, IRAS encourage tax payer to reach out to IRAS early to work out a suitable payment arrangement. Otherwise, a 5% late payment penalty will be imposed on the overdue tax.
For Individuals or Businesses in Financial Difficulties – Arranging for a Longer Payment Plan
IRAS will only grant instalments by GIRO. Tax payer can appeal for a longer payment plan via the ‘Apply for Payment Plan’ e-Service at myTax Portal using your SingPass, IRAS Unique Account(IUA) or CorpPass.
IRAS will review your request and inform you of the outcome within 15 working days. Where needed, IRAS may ask more information to better understand and assess your situation.
Automatic Deferment of Corporate Income Tax(CIT) Payments
To further ease the cash flow needs for companies in the immediate period, it was announced in the Resilience Budget on 26 Mar 2020 that all companies with Corporate Income Tax(CIT) payments due in the months of Apr, May and Jun 2020 will be granted an automatic three-month deferment of these payments. The CIT payments that are deferred from April, May and June 2020 will be collected in July, August and September 2020 respectively. The deferment applies to CIT payments due in the months of Apr, May and Jun 2020, regardless of which YA the taxes or payments relate to. This relief measure complements the automatic extension of two months interest free instalments as announced in Budget 2020 on 18 Feb 2020.
Companies can expect to receive a letter from IRAS by April 2020. Those on GIRO and have on- going CIT payments due in April, May and June 2020 can view their revised instalment plans at myTax Portal in early May 2020. Companies who are not on GIRO and are required to make a one- time CIT payment in April, May and June 2020.
Payment Extension for One-Time Payments
For one-time income tax payments due in May, June and July 2020, there will be a 3-month deferment to August, September and October 2020 respectively. For example, if the due date is initially 15 May 2020, the extended due date for payment will be 15 August 2020. No application is required.
Property Tax Measures
Non-residential properties will be granted property tax rebate for the period 1 January 2020 to 31 December 2020. Commercial properties badly affected by COVID-19 like hotels, serviced apartments, tourist attractions, shops and restaurants will receive a 100% rebate. Other non-residential properties such as offices and industrial properties will get a 30% rebate on their property tax payable.
IRAS will send out the rebate notices by 31 May 2020. Property owners can expect to receive their refunds by 30 June 2020.
Government Cash Grant
The Government announced on 26 May 2020 as part of the Fortitude Budget, a Government cash grant to qualifying property owners that would support rental relief for SMEs(Small and Medium Enterprises) and specified NPOs(Non-Profit Organisations) tenant-occupiers of prescribed properties.
The amendments to the COVID-19(Temporary Measures) Act 2020(“Act”), as well as the related subsidiary legislation, COVID-19(Temporary Measures) (Rental and Related Measures) Regulations 2020, which provide the Rental Relief Framework for SMEs and specified NPOs, have come into force on 31 July 2020.
From early August 2020, IRAS will issue a notice of cash grant and disburse the Government cash grant to qualifying property owners(i.e. eligible SME/NPO owner-occupiers and owners with eligible SME/NPO tenant-occupiers).
The majority of owners should receive the notice by mid-August 2020. The notice of cash grant will inform property owners of the rental waivers they should provide to their tenants under the Rental Relief Framework. The Rental Relief Framework also generally applies to tenants/ sub-tenants of Government landlord.
Qualifying property owners, who are eligible SME/NPO owner-occupiers and/or who have eligible SME/NPO tenant-occupiers operating in the prescribed properties, will generally receive the Government cash grant of 0.8 * (Annual Value / 12) for qualifying commercial properties(e.g. shops) or 0.64 * (Annual Value / 12) for other non- residential properties(e.g. industrial/ office properties). Government cash grant will be prorated for properties where the occupiers(including owner(s) and/or tenant(s), as the case may be) comprise a mix of SMEs and non-SMEs. The amount of Government cash grant will be calculated based on the Annual Value(AV) of the property for Year 2020, determined by IRAS at 13 April 2020. There will be no revisions to the Government cash grant amount, even if there are subsequent changes to the AV for Year 2020 after 13 April 2020.
Enhanced Jobs Support Scheme(JSS)
JSS(Jobs Support Scheme) was launched in Budget 2020 to help businesses retain their local employees during this period of uncertainty. The JSS provides employers with between 25% and 75% wage support for the first $4,600 gross monthly wage paid to each local employee(including shareholder-directors). Employers do not need to apply for the JSS. The cash grant will be computed based on CPF(Central Provident Fund) contribution data.
To support firms during the circuit breaker period, wage support for the months of Apr and May 2020 have been topped up to 75% for all firms, regardless of sector. Employers will receive three main JSS payouts in Apr, Jul and Oct 2020, with an additional payout in May 2020.
As announced in the Fortitude Budget, the JSS was extended by one month to cover wages paid in Aug 2020. The support for Aug 2020 wages will be paid out in Oct 2020.
To provide continued support for employers during the phased reopening post-circuit breaker, employers across all sectors will continue to receive 75% support for wages paid to local employees until they are allowed to resume operations, or until Aug 2020, whichever is earlier. Proration will be applied if operations resume in the middle of the month.
The list of sectors deemed to be directly and severely affected by travel restrictions and/or safe distancing measures has also been updated. This change will also be applied retrospectively to previous payouts, and employers will receive a top-up on these previous payouts by Jul 2020. This is with the exception of the built environment sector, which will receive the higher base tier for Jun 2020 to Aug 2020 wages only.
Extension of JSS(as announced on 17 Aug 2020 in the Ministerial Statement on Continued Support for Workers and Jobs)
To provide continued support for businesses and workers amidst the protracted economic downturn, the JSS will be extended by seven months to cover wages up to Mar 2021. The support levels will be tapered as the economy reopens and stabilises, and calibrated based on the projected recovery of the various sectors. Employers will receive between 10% and 50% JSS support for wages paid for Sep 2020 to Mar 2021. There will be exception to some Tier 3 sectors(e.g. Info- comm Media, Financial Services and Biomedical Sciences) which will receive 10% JSS support for Sep to Dec 2020 wages. Employers in the Built Environment sector will receive 50% JSS support for Sep and Oct 2020 wages and a reduced JSS support of 30% for Nov 2020 to Mar 2021 wages, in line with the phased and gradual resumption of construction activities.
Employers who are not allowed to resume on-site operations during phased reopening will receive 50% JSS support during the period for which they are not allowed to resume operations, from September 2020 to March 2021.
*Source: Inland Revenue Authority of Singapore