Singapore Income Tax Treatment of COVID-19-Related Payouts
- Details
NOT-Taxable Payouts
S/N | Payout | Purpose of Payout | Tax Treatment of Payout |
1 | Self-Employed Person Income Relief Scheme payout | To help eligible self-employed persons (SEPs) tide over this period of economic uncertainty | NOT taxable as the payout is meant to support individuals through the exceptional circumstances arising from the COVID-19 pandemic |
2 | COVID-19 Support Grant | To support individuals who have lost their jobs as a result of the COVID-19 pandemic, while they find a new job or attend training | |
3 | Workfare Special Payment (under Care and Support package) | To provide support to Singaporeans during this period of economic uncertainty | |
4 | Temporary Relief Fund payout | To support those who require immediate help to cope with basic living expenses as a result of the COVID-19 pandemic | |
5 | NTUC Care Fund (COVID-19) payout | To provide one-off financial assistance to National Trades Union Congress (NTUC) union members who are in financial difficulty or retrenched due to the COVID-19 pandemic | |
6 | 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 Relief Package | To provide wage support for licensed tourist guides | NOT taxable as the payout is meant to support individuals through the exceptional circumstances arising from the COVID-19 pandemic |
7 | To assist Singaporean seafarers who are unable to secure shipboard employment | ||
8 | Jobs Support Scheme Payout | To help enterprises retain local employees (Singapore Citizens and Permanent Residents) during this period of economic uncertainty | NOT taxable as the payout is to help employers retain their local employees by providing cashflow support or mitigate the financial impact of COVID-19 containment measures for employers and SEPs |
9 | COVID-19 Quarantine Order Allowance scheme payout COVID-19 Leave-of Absence (LOA) scheme payout | To mitigate the financial impact for those who have been served, or whose workers have been served, a Quarantine Order, LOA or SHN | |
COVID-19 Stay-Home Notice (SHN) scheme Payout | |||
10 | Courage Fund COVID19 Relief schemes For more information on the schemes, please refer to NCSS | To provide relief and support to low-income families, healthcare workers and other specified individuals who have supported the national response to COVID-19 and in doing so, contracted COVID19 | NOT taxable as these are unconditional gifts |
Taxable Payouts
S/N | Payout | Purpose of Payout | Tax Treatment of Payout |
1 | Temporary Housing Support for employers affected by Malaysia's Movement Control Order | To help employers defray the additional costs of providing short-term housing to affected workers | Taxable as the payout received is to defray the operating costs of a business and is revenue in nature |
2 | Senior Worker Support Package • Senior Employment Credit • CPF Transition Offset Scheme • Senior Worker Early Adopter Grant • Part Time Reemployment Grant | To support employment of senior workers | |
3 | Assistance scheme to defray third-party professional cleaning and disinfection costs for premises with confirmed COVID-19 cases | To provide assistance to defray cleaning costs for premises with confirmed COVID-19 cases | |
4 | Special relief for unhired taxis | To help taxi operators defray the costs of their unhired fleet of taxis | |
5 | Wage Credit Scheme (including the enhancements made as part of the Stabilisation and Support Package in Budget 2020) | To support wage increases for Singaporean workers | |
6 | Jobs Growth Incentive | To provide wage support to eligible employers with new local hires between Sep 2020 and Feb 2021 | |
7 | Construction Restart Booster | To help construction firms defray costs in procuring additional materials/equipment to comply with COVID-Safe Worksite requirements |
Budget 2020: Advancing as One Singapore
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1 Deputy Prime Minister and Minister for Finance Heng Swee Keat delivered the Singapore Government’s Budget Statement for Financial Year 2020 in Parliament on Tue, 18 February 2020.
2 Budget 2020 is presented against a backdrop of the on-going COVID-19 outbreak, as well as broader uncertainties in the landscape.
3 There are also long-term structural shifts taking place around the world – a decline in support for globalisation, a shift in economic weight towards Asia, technological disruption, and an ageing population in many countries.
Singapore Rental Relief Framework for SMEs
- Details
- The rental relief framework provides mandated co-sharing of rental obligations between the Government, landlords and tenants
- The new rental relief framework will also be applicable for eligible Non-Profit Organisations (NPOs) and tenants of government properties
- These measures are intended to establish a baseline position for the handling of tenants’ rental obligations:
- Rental relief provided by Government and Landlords
- Eligible SMEs which are occupying tenants (including subtenants and licensees) can receive a total of 4 months’ waiver of base rental for qualifying commercial properties (e.g shops), and a total of 2 months’ waiver of base rental for industrial and office properties, provided by the Government and landlords
Duration of Rental Relief | ||
Type of Relief | Qualifying Commercial Properties (e.g. Shops) | Industrial/ Office Properties |
(A) Rental Relief for eligible SMEs (supported by Government Assistance) | ||
Rental Waiver | 2 months (for April – May 2020) | 1 month (for April 2020) |
(B) Additional Rental Relief for eligible SMEs (borne by landlord) | ||
Rental Waiver | 2 months (for June – July 2020) | 1 month (for May 2020) |
Total | 4 months (for April – July 2020) | 2 months (for April – May 2020) |
- Government Assistance
- Owners of qualifying commercial properties (e.g. shops)
- Approximately 1.2 months of rent through the property tax rebate
- Additional cash grants approximately equivalent to 0.8 month of rent
- Landlords will be required to grant eligible smes 2 months’ waiver of their base rental
- Owners of industrial/ office properties
- Approximately 0.36 month through the property tax rebate
- Approximately 0.64 month of rent
- Landlords will be required to grant 1 month’s waiver of their base rental
- Conditions:
- With not more than $100 million in annual turnover reported in their tax returns filed for year of assessment 2019, and
- (i) entered into before 25 march 2020 or
- (ii) entered into before 25 march 2020 but expired and renewed automatically, or in exercise of a right of renewal in the contract
- Owners of qualifying commercial properties (e.g. shops)
- Landlord
- The rental waivers may subject to conditions be offset by any previous direct monetary assistance provided by the landlord to the tenant (or subtenant/licensee) and/or any passing on of the Property Tax Rebate from property owners to their tenants
- Government Assistance
- Eligibility Criteria for Additional Rental Relief to be provided by Landlords
- Occupying tenants (including subtenants and licensees) will need to satisfy all criteria below to be eligible for the mandatory rental relief co-shared by landlords:
- SME at the group level (≤$100 million turnover in 2019);
- Substantial drop in average monthly revenue during COVID-19 (average monthly revenue from April to May 2020 on an outlet level reduced by 35% or more, compared to April to May 2019); and
- The tenancy must be in force on 1 April 2020 and must have been: (i) entered into before 25 March 2020; or (ii) entered into before 25 March 2020 but expired and was renewed automatically, or in exercise of a right of renewal in the contract
- Occupying tenants (including subtenants and licensees) will need to satisfy all criteria below to be eligible for the mandatory rental relief co-shared by landlords:
- Landlord’s application for assessment
- Landlords will have the opportunity to apply to have an Assessor determine whether the tenant satisfies the eligibility criteria. The case will be examined by an Assessor, who will ascertain the tenant’s (or subtenant’s/licensee’s) eligibility. The legislation will require that tenants provide the necessary information to determine eligibility to the landlord upon request
- The landlord may also seek an assessment on the grounds of financial hardship if they are unable to provide the additional rental waiver. This will take into consideration the annual value of the landlord’s properties and the proportion of the landlord’s dependence on the rental income for his livelihood
- If the landlord meets the grounds of financial hardship, the Assessor can halve the amount of additional rental relief that needs to be provided by the landlord, i.e. 1 month waiver of base rental for qualifying commercial properties, and half a month waiver of base rental for industrial and office properties
- The Assessor’s determination will be binding on both the landlord and the tenant
- Repayment scheme for rental arrears
- If the tenant fails to make a payment under the statutory repayment scheme within a prescribed period of time, or the tenant terminates the lease or licence, or the landlord terminates the lease agreement for any other default by the tenant, the statutory repayment scheme will be cancelled, and the landlord will be entitled to:
- Immediate payment of all the arrears
- Take steps under the contract for rentals not paid.
- Landlords may also draw the existing security deposits to offset accumulated rental arrears during the repayment period. They may do so, until there is the equivalent of one month of rent remaining in the security deposit. At the end of the repayment period, the tenant will be obliged to reinstate the security deposit to the contractual amount
- Tenants who have rescheduled the payment of arrears will have to provide specified documents and information to their landlords if: (a) the lease agreement is terminated or repudiated during the repayment period; and (b) there are 2 or more rescheduled repayment instalments outstanding
- The documents and information to be provided will include filing a statutory declaration on their statement of accounts from April 2020 until the termination or repudiation of the lease. The tenant will also be required to set out how he proposes to repay the outstanding rental arrears
- If the tenant fails to make a payment under the statutory repayment scheme within a prescribed period of time, or the tenant terminates the lease or licence, or the landlord terminates the lease agreement for any other default by the tenant, the statutory repayment scheme will be cancelled, and the landlord will be entitled to:
