Update to Income Tax Treatment of COVID-19-Related Payouts to Businesses

The Inland Revenue Authority of Singapore (IRAS) published an updated version of its overview of the Income Tax Treatment of COVID-19-Related Payouts to Businesses and Individuals on 7 December 2020. It was first published in July 2020.

Here is the overview of the payouts that are not taxable either because they are not income in nature or a specific exemption has been granted to exempt the payout from tax, as well as payouts that are taxable, being revenue receipts of a business, in accordance with general income tax rules.

Payout	Reason for Payout	Taxability
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
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.
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.	Taxable as the payout received is to defray the operating costs of a business and is revenue in nature.
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.	Taxable as the payout received is to defray the operating costs of a business and is revenue in nature.
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.	Taxable as the payout received is to defray the operating costs of a business and is revenue in nature.
Jobs Growth Incentive	To provide wage support to eligible employers with new local hires between Sep 2020 and Feb 2021.	Taxable as the payout received is to defray the operating costs of a business and is revenue in nature.
Construction Restart Booster	To help construction firms defray costs in procuring additional materials/equipment to comply with COVID-Safe Worksite requirements.	Taxable as the payout received is to defray the operating costs of a business and is revenue in nature.