With Singapore approaching its 60th year of independence in 2025, it stands as a resilient global hub, thriving in the face of adversity and global uncertainties. Central to this success is the government's unwavering commitment to build a robust fiscal framework. Budget 2025 represents a continuation of this vision, one that addresses both current needs and future aspirations for all Singaporeans and business communities in Singapore.

While the outlook for 2025 seems positive, the global environment remains volatile. The Budget forecasts more moderate growth for the year, with GDP growth expected to range between 1% to 3%, and inflation is expected to average between 1.5% to 2.5%.  Despite these challenges, Singapore is better equipped than ever to navigate and mitigate these external pressures.

Budget 2025 builds upon the progress of previous years, addressing both immediate challenges while laying groundwork for long-term success.  It also reflects the aspirations of the people through the Forward Singapore initiative, ensuring that the nation's path forward remains inclusive, sustainable, and resilient. Several measures in the form of enhancement of wage credits, extension of certain grants and tax incentives, additional funding to National Productivity Fund as well as air, energy and R&D Infrastructure to help with the business competitiveness have been introduced.

A critical focus of the Budget is to provide relief and incentives that stimulate growth and strengthen Singapore’s international competitiveness. On the corporate and business front, the key tax changes in SG60[1] Budget include a 50% Corporate Income Tax (CIT) Rebate for Year of Assessment 2025. Companies that have employed at least one local employee in Calendar Year (CY) 2024 will receive a minimum benefit of S$2,000 in the form of a CIT Rebate Cash Grant. The total maximum benefit a company can receive (combining the CIT Rebate and Cash Grant) is S$40,000.  This rebate aims to support businesses as they continue to contribute to Singapore’s economy and employ local talent.

In a bid to further promote international expansion, the government is extending the Double Tax Deduction for Internationalisation (DTDi) and the Mergers & Acquisitions (M&A) schemes until 31 December 2030. These initiatives demonstrate Singapore’s commitment to enabling local businesses to reach new markets and pursue cross-border growth. Additionally, another key change is to provide better tax certainty by way of removal of the sunset date for the non-taxation of disposal gains earned by companies (i.e. safe harbor rules). Further, effective 1 January 2026, the safe harbor provisions is proposed to be expanded by way of including preference shares accounted for as equity and further, minimum shareholding threshold (of 20%) condition will now be assessed on a group basis.

Another important change for Singapore corporates, which also aligns with tax treatment in few other countries, is to allow tax expenditure deduction for payments made to the holding company or a special purpose vehicle (SPV) for the issuance of new shares under Employee Equity-Based Remuneration (EEBR) Schemes. Separately, effective 19 February 2025, companies are allowed to claim 100% tax deduction for payments made under an approved Cost-Sharing Agreements (CSA) for innovation activities. These new measures seek to support collaborative innovations and foster stronger partnerships across various sectors.

In tandem with these business-focused measures, Budget 2025 introduces several important tax reforms aimed at strengthening Singapore’s position as a global financial hub.

For the financial services sector, the introduction of a 15% Corporate Tax Rebate (CTR) tier for the Financial Sector Incentive (FSI) schemes, including FSI-Standard Tier and FSI-Headquarter Services, is effective 19 February 2025. This new tier will apply to the FSI-Standard Tier, FSI-Trustee Company, and FSI-Headquarter Services schemes, ensuring growth of Singapore’s financial services sector.

The Budget also includes benefits for the insurance sector by way of extending the Insurance Business Development (IBD) and IBD-CI schemes until 31 December 2030. These schemes, together with the introduction of a new CTR tier of 15%, will ensure that Singapore remains a key player in the Asian insurance and reinsurance centre.

Real Estate Investment Trusts (S-REITs) continue to be an area of focus in Budget 2025. The tax concessions for S-REITs have been extended until 31 December 2030, with significant refinements including the inclusion of co-location and co-working income, effective from 1 July 2025. These changes will continue support the continued growth of the S-REIT sector, further reinforcing Singapore’s position as a global REIT hub. In addition, the sunset date for tax concessions has been removed, ensuring that these vehicles can continue to benefit from tax incentives until at least 31 December 2030.

Another significant move to boost demand for Singapore-listed equities and encourage new listings comes in the form of tax incentives introduced based on recommendations by the Equities Market Review Group. Companies that achieve a primary or secondary listing in Singapore can now avail themselves of a Corporate Income Tax (CIT) Rebate. For primary listings, qualifying entities will receive a 20% CIT rebate, while secondary listings (with share issuance) will receive a 10% CIT rebate. The rebate is subject to a cap of S$6 million per YA for entities with a market capitalization of at least S$1 billion, and S$3 million per YA for those with a market capitalization of less than S$1 billion. To qualify, entities must achieve a primary or secondary listing on a Singapore exchange and remain listed for 5 years, with commitments to incremental local business spending, fixed asset investments, and skilled employment.

A related proposal is to introduce an enhanced 5% Corporate Tax Rate (CTR) for new fund manager listings in Singapore, supporting the growth of the asset management sector. Fund managers will be required to meet certain criteria, such as distributing a portion of their profits as dividends and maintaining a professional headcount and assets under management (AUM). This move seeks to attract more fund managers to Singapore, thereby expanding the country’s investment management industry.

Additionally, fund managers investing substantially in Singapore-listed equities will enjoy tax exemptions on their qualifying income, further encouraging investment in the Singapore-listed equities market. To qualify, new funds must have at least 30% of their assets under management (AUM) invested in Singapore-listed equities, while existing funds must meet the same requirement along with annual net inflows of at least 5% of AUM. The above scheme(s) / incentive (s) will be open for applications until 31 December 2028.

The government has also extended its commitment to infrastructure projects, offering tax incentives under the Qualifying Debt Securities (QDS) scheme. The Qualifying Debt Securities (QDS) scheme will remain in place, ensuring that investors continue to benefit from tax incentives. To support Singapore-based infrastructure project sponsors investing in overseas infrastructure projects, the tax incentive will be extended until 31 December 2030.

For the venture capital sector, the Venture Capital Fund Incentive (VCFI) and the Venture Capital Fund Management Incentive (FMI) will lapse after 31 December 2025. However, the government has assured continued support for the sector through a more holistic range of policies and initiatives.

The Budget also brings several changes to Singapore’s withholding tax (WHT) regime, including adjustments for non-tax-resident mediators and arbitrators. The existing WHT concession for non-tax-resident mediators and arbitrators will be allowed to lapse after 31 December 2027. This move ensures parity in the treatment of non-tax-resident professionals across various sectors. The government will continue to support the commercial mediation and international arbitration sectors through various policies.

New measures to support shipping and container financing are also introduced, including the introduction of the Approved Shipping Financing Arrangement (ASFA) Award. This will provide WHT exemptions for qualifying financing arrangements, supporting Singapore’s maritime and shipping industry. The MSI scheme, which offers tax incentives for the maritime sector, will also be extended until 31 December 2031, with additional enhancements to include emission management services and offshore renewable energy activities, further reinforcing the sector’s sustainability.

On the individual front, the budget provides vouchers to offset inflation, tax rebate (capped at S$ 200 for Year of Assessment 2025 per taxpayer), significant additional support for skills development, support to ‘large’ families with more than 2 kids and various other support measures.

Further details on the above tax changes introduced in SG60 Budget will be provided by the relevant authorities, including the Inland Revenue Authority of Singapore (IRAS), the Economic Development Board (EDB), and the Monetary Authority of Singapore (MAS), by the second and third quarters of 2025.

In conclusion, Budget 2025 is a forward-looking plan designed to ensure Singapore’s continued resilience and growth. Through targeted tax incentives and strategic reforms, the government is laying the foundation for sustained economic prosperity. These initiatives will help businesses thrive, attract international investments, and further enhance Singapore’s position as a global leader in fund industry, finance, insurance, real estate, and maritime services.