• https://verti.sg/wp-content/uploads/2020/09/header_icon01.png
    Location

    77 High Street, #05-02, High Street Plaza, Singapore 179433

  • https://verti.sg/wp-content/uploads/2020/09/header_icon02.png
    Phone us

    Office: +65 6909 5691

    HP: +65 8923 8819

  • https://verti.sg/wp-content/uploads/2020/09/header_icon03.png
    email us

    contactus@verti.sg

Are We Taxable On Government Grants

Taxability on Government Grants/Payout

There were many questions raised whether or not Government Grants/Payout are Taxable. Especially, since last April 2020 where many Grants/Payout are given to companies due to Covid 19.

In general, the guiding principle on taxability of grants/payout are:

  • Grant/ payout will be taxable if it is given to supplement trading receipts or to defray operating expenses of the company (i.e. grant/ payout is revenue in nature)
  • Grant/ payout will not be taxable if it is given for the purpose of acquiring capital assets of the company (i.e. grant/ payout is capital in nature)

 

As announced in Budget 2020, tax deductions and allowances (i.e. capital allowances, writing-down allowances and investment allowances) will no longer be given on expenditures funded by capital grants from the Government or Statutory Boards that are approved on or after 1 Jan 2021. For expenditures that are partially funded by capital grants, tax deductions and allowances will only be allowed on the net amount. This change seeks to eliminate double-incentivisation where the capital grants are not taxed while the expenditures funded by these grants are eligible for tax deductions and allowances.

If you have applied for grants, you may refer to the Infographic below to check if the grants/payout are taxable or not.

 

Government Grant Taxable or Non-Taxable?
Covid 19 related

Taxable Non-Taxable
  • Temporary Housing Support for employers affected by Malaysia’s Movement Control Order
  • Senior Worker Support Package
  • Assistance scheme to defray third-party professional cleaning and disinfection costs for premises with confirmed COVID-19 cases
  • Special relief for unhired taxis
  • Wage Credit Scheme (including the enhancements made as part of the Stabilisation and Support Package in Budget 2020)
  • Self-Employed Person Income Relief Scheme payout
  • COVID-19 Support Grant
  • Workfare Special Payment (under Care and Support package)
  • Temporary Relief Fund payout
  • NTUC Care Fund (COVID-19) payout
  • Wage support for tourist guides licensed by the Singapore Tourism Board
  • Payout to Singaporean seafarers funded by the Maritime and Port Authority of Singapore under the Seafarers ReliefPackage
  • COVID-19 Recovery Grant
Taxable Non-Taxable
  • Job Growth Incentive
  • Construction Restart Booster
  • COVID-19 Recovery Grant (Temporary)
  • Market and Hawker Centre Relief Fund
  • Jobs Support Scheme payout
  • COVID-19 Quarantine Order Allowance scheme payout
  • COVID-19 Leave-of Absence (LOA) scheme payout
  • COVID-19 Stay-Home Notice (SHN) scheme payout
  • Government cash grant (announced in Fortitude Budget)
  • Courage Fund COVID’19 Relief schemes
  • Rental Support Scheme (RSS)
Taxable Non-Taxable
  • Productivity and Innovation Credit Bonus
  • Wage Credit
  • Government Paid Leave/Benefit
  • Special Employment Credit (SEC)
  • iSPRINT
  • Temporary Employment Credit (TEC)
  • Skill Future Enterprise Credit
  • Enterprise Development Grant
  • Productivity and Innovation Credit (PIC)
  • SME Go Digital Programme

Disclaimer: Information correct as of 7 Sep 2021
Refer to IRAS website for eligibility and more information on the grants / payouts (www.iras.gov.sg)

To find out more

Call us: +65 8923 8819 or Email: Infoaverti.sg

Source: IRAS | Tax Treatment of Grants/ Payouts Commonly Received by Companies

We provide:
– Strategic advice to the company’s board of directors
– Virtual Receptionist
– Registered Address
– Leads Qualifications
– Expense Management

Speak with us for a customised solution for your business needs.

Ready to take off and go beyond your borders?
We provide:
Go to market strategy in multiple Asia Markets
Customised prospection: Looking for potential agents, distributors, imports?
Integrated sales to development program to maximise your business growth in the market

Corporate Tax & Goods & Services Tax (GST Singapore) / VAT
Verti provides advice, tax computation and tax filing on your Corporate (ECI, Form C/CS Form) issues, to ensure adherence to regulations.

Personal Tax
If you are a Singaporean, Singapore Permanent Resident or a foreigner who has lived and worked in Singapore for at least 183 days in the tax year, you are required to pay personal taxes on your chargeable income as a tax resident. Non-residents who have lived and worked in Singapore for less than 183 days in the tax year may also be required to pay taxes. The corresponding forms you will have to fill out include:

• Form B1 (individual tax residents)
• Form B (self-employed)
• Form M (non-residents)

Other taxes, that individuals may have to pay, include those imposed on property, rental income, stamp duty, motor vehicles and Central Provident Fund (CPF) contributions.

A corporate secretary needs to be familiar with the Singapore Companies Act and the various
requirements stipulated by the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).

“Great incorporation gives you a great head start for your business!”
As a gateway to Southeast Asia, Singapore continues to be the leading hub for businesses to gain their presence, be it world’s largest multinational corporations or fast-growing start-ups.

Having us to steer you around with Singapore’s rules & regulations would accelerate your success route in this business-friendly city.

a) For Singapore or Permanent Resident
b) For Foreigner Individual (+ VISA/Work permit related matters for key personnel of the Business)
c) For Foreigner Companies

Subsidiary Company:
Subsidiary Company + Employment Pass
Subsidiary Company + Nominee Director

Branch Office
Branch Office + Employment Pass
Branch Office + Nominee Agents

Representative Office
Singapore Representative Office Setup

Open chat
Hello! Welcome to Verti, we are very excited to have you on board. How can we help you today?