Singapore Budget 2025 Commentary
Discover what this year's Budget means for you and your business.
Companies awarded the Land Intensification Allowance (LIA) incentive can claim the following allowances on qualifying capital expenditure incurred to construct/extend an approved building:
- Initial allowance – 25%; and
- annual allowance – 5% over 15 years
To qualify for the LIA, at least 80% of the gross floor area of the building must be used by the incentive recipient or its related users where such related users must have at least 75% common shareholding, directly or indirectly. The scheme is due to lapse after 31 December 2025. To continue encouraging intensive land use, the scheme will be extended for another five years till 31 December 2030. Also, the 75% common ownership threshold will be reduced. For LIA applications from 1 January 2026, related users need only have more than 50% common ownership. More details will be provided by the Building and Construction Authority and Economic Development Board by the third quarter of 2025.
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Tax measures for Shipping Enterprises
The Approved Shipping Financing Arrangement award offers withholding tax exemptions for Singapore-based ship and container owners/ managers. The Maritime Sector Incentive is extended to 2031, with enhancements to support industry developments.
Other tax changes
The Double Tax Deduction for Internationalisation Scheme is extended to 31 December 2030. The withholding tax concession for non-resident arbitrators and mediators lapses after 31 December 2027. The Mergers and Acquisitions scheme is extended to 31 December 2030, maintaining current conditions and exclusions.
Electric heavy goods vehicles and buses
Electric vehicles are not subject to fuel excise duties, unlike internal combustion engine vehicles. To balance revenue loss, the Additional Flat Component was introduced in Budget 2020 and extended to electric heavy goods vehicles and buses from January 2026.
Corporate income tax rebate
Companies get a 50% tax rebate for 2025. Non-profitable firms with local hires in 2024 receive a $2,000+ cash grant, with benefits up to $40,000.
Climate measures
Singapore's 2025 Budget reinforces its commitment to climate action with increased funding for energy transition, adaptation measures, and sustainable finance.
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