🔥 Breaking News: Budget 2026 Announced
Prime Minister and Finance Minister Lawrence Wong delivered the Singapore Budget 2026 statement on 12 February 2026. The headline for business owners is an enhanced 50% Corporate Income Tax Rebate and a new strategic focus on Artificial Intelligence (AI) adoption.
What's the headline for business owners? An enhanced 50% Corporate Income Tax (CIT) Rebate for YA 2026, capped at S$40,000, with a S$2,000 minimum cash grant for companies with at least one local employee (excluding shareholder-directors). Plus: S$1 billion for Startup SG Equity, enhanced support for AI adoption, and expanded internationalisation grants.
50% rebate
Cap: S$40,000
Min: S$2,000 cash grant
New: S$6,000 (from S$5,600)
From: 1 Jan 2027
Renewals: 1 Jan 2028
400% deduction
Cap: S$50,000 per YA
YA 2027 & 2028 only
Key Takeaways — Budget 2026 for Singapore Businesses
- 50% CIT Rebate (YA 2026): Capped at S$40,000. Minimum S$2,000 cash grant for companies with at least one local employee (SC/PR, excluding shareholder-directors).
- EP and S Pass salary hikes: New EP: S$6,000 (S$6,600 for financial services). New S Pass: S$3,600 (S$4,000 for financial services). Effective 1 January 2027. Renewals: 1 January 2028.
- AI tax deductions: 400% deduction on up to S$50,000 of qualifying AI spend for YA 2027 and YA 2028.
- Internationalisation boost: MRA grant support increased to 70% for SMEs until 31 March 2029.
- Startup SG Equity: S$1 billion top-up, now covering growth-stage companies in deep tech.
Fast Facts — Budget 2026 at a Glance
Singapore Budget 2026 is here — and it delivers enhanced benefits for business owners, from a 50% Corporate Income Tax (CIT) Rebate to enhanced AI incentives and expanded overseas support.
Delivered by Prime Minister and Finance Minister Lawrence Wong on 12 February 2026, the Budget balances short-term cost relief with long-term growth investments in AI, talent, and internationalisation.
Not sure which measures apply to your business? Terra Advisory is an ACRA‑registered filing agent that helps Singapore companies navigate Budget 2026 — from claiming the enhanced CIT Rebate to structuring AI investments and preparing for EP threshold changes.
Table of Contents
1. Enhanced 50% Corporate Income Tax Rebate (YA 2026)
The headline measure of Budget 2026 has been enhanced. As announced by IRAS:
- The rebate: 50% of corporate tax payable
- The cap: S$40,000 per company (total maximum benefits)
- Minimum benefit: S$2,000 cash grant for companies with at least one local employee in 2025
- Local employee definition: Singapore Citizen or Permanent Resident, excluding shareholder-directors
- Automatic application: The rebate is automatically computed by IRAS when you file Form C-S/C
Ready to capitalize on these terms? You can map out your total setup costs, government timelines, and structural options right now through our Master Singapore Company Incorporation Hub.
- If CIT Rebate ≤ S$2,000: No CIT Rebate given — company receives only the S$2,000 cash grant
- If CIT Rebate > S$2,000: CIT Rebate (capped at S$40,000) minus S$2,000
2. EP and S Pass Salary Thresholds (Effective 2027)
To maintain workforce quality as local wages rise, the government is raising the minimum qualifying salaries for Employment Pass (EP) and S Pass holders.
| Pass Type | Current (2026) | New (From 1 Jan 2027 / Renewals 1 Jan 2028) | Financial Services |
|---|---|---|---|
| Employment Pass (EP) | S$5,600 | S$6,000 | S$6,600 |
| S Pass | S$3,300 | S$3,600 | S$4,000 |
| EP (Age 45+) | S$10,700 | S$11,500 | S$12,700 |
| S Pass (Age 45+) | S$4,800 | S$5,100 | S$5,650 |
You do not need to increase salaries immediately. These changes apply to new applications starting 1 January 2027. Current pass holders are not affected until their renewal dates after the implementation period — renewals take effect from 1 January 2028.
🛂 Navigating pass thresholds remotely? If you are a foreign founder trying to coordinate residency status or local director mandates alongside these upcoming changes, review our dedicated guide on Singapore Company Ownership for Non-Residents.
Need help preparing for the EP threshold changes? Terra Advisory provides work pass advisory and corporate secretarial services to ensure your company stays compliant.
3. The AI Revolution: 400% Tax Deductions
The government is putting its money where its mouth is regarding AI adoption.
- 400% Tax Deduction: Under the expanded Enterprise Innovation Scheme (EIS), businesses can now claim a 400% tax deduction on qualifying AI expenditures (e.g., software, training, implementation), capped at S$50,000 of qualifying spend per YA.
- Applicable: YA 2027 and YA 2028 only
- Champions of AI Programme: A new programme to support enterprises in transforming their businesses through AI.
- S$1 Billion Fund: A top-up to the Startup SG Equity scheme specifically for deep tech and AI startups.
- National AI Council: Chaired by Prime Minister Lawrence Wong to coordinate Singapore's AI agenda.
📊 Important Accounting Safeguard: Claiming a 400% AI deduction requires meticulous transactional tracking to pass IRAS scrutiny. To ensure your software, training, and development invoices are structured correctly to meet EIS compliance, view our advisory options on the Singapore Accounting Services Hub.
4. Overseas Expansion Support
For SMEs looking to grow beyond Singapore, the Market Readiness Assistance (MRA) grant has been enhanced.
| Feature | Previous Support | New Budget 2026 Support |
|---|---|---|
| Support Level | 50% of eligible costs | 70% of eligible costs |
| Grant Cap | S$100,000 per market | S$100,000 per market |
| Breakdown | — | Promotion (S$20,000) / Development (S$50,000) / Set-up (S$30,000) |
| Validity | Until 31 March 2025 | Extended to 31 March 2029 |
This covers market setup, business matching, and overseas marketing promotion.
EDGE Scheme (New)
A new scheme streamlining the Market Readiness Assistance (MRA), Productivity Solutions Grant (PSG), and Enterprise Development Grant (EDG) into a single, seamless support framework.
5. Startup SG Equity & Funding
S$1 Billion Boost for Startup SG Equity
The government has set aside S$1 billion to enhance the Startup SG Equity scheme, now expanded to cover growth-stage companies — not just early-stage startups — with a focus on deep tech.
S$1.5 Billion Anchor Fund (Second Tranche)
Another S$1.5 billion tranche will be launched, co-invested with Temasek, to attract high-quality listings to the Singapore Exchange (SGX).
S$1.5 Billion Financial Sector Development Fund Top-Up
This will strengthen the asset management industry and increase investor participation in Singapore's equities market.
6. Sustainability & Green Financing
Enterprise Financing Scheme – Green (EFS-Green)
Extended for five years until 31 March 2031, providing continued access to government-backed loans for green projects and sustainable technology investments.
Energy Efficiency Grant (EEG)
Extended until 31 March 2027 to help businesses invest in energy-efficient equipment.
S$800 Million Decarbonisation RIE Grand Challenge
As part of RIE 2030, Singapore will invest S$800 million over five years to accelerate low-carbon technology development, focusing on power generation and industrial processes.
7. Workforce Transformation
Enterprise Workforce Transformation Package
Over S$400 million set aside to help companies transform their workforce and redesign jobs.
Want to maximise your Budget 2026 benefits?
Terra Advisory helps you claim the enhanced CIT Rebate, structure AI investments, prepare for EP changes, and access grants — all from one team.
Budget 2026 brings significant opportunities — but navigating the measures requires expert guidance. We provide dedicated, personal service from our first conversation to your ongoing compliance and tax filings.
If you do not fully understand any aspect of the Budget measures, we will pause and will not move forward until you are ready.
We quote and design only the specific services your business actually requires.
Frequently Asked Questions — Budget 2026
📊 Don't Leave Budget 2026 Benefits on the Table.
From the enhanced 50% CIT Rebate to AI tax deductions and internationalisation grants, Budget 2026 offers significant opportunities. Terra Advisory helps you claim every benefit you're entitled to — and plan for the changes ahead.
We provide corporate secretarial, tax advisory, and compliance services to keep your company ahead of the curve.
ACRA‑Registered Filing Agent | Transparent Pricing | 100+ Clients
Official sources: IRAS — Inland Revenue Authority of Singapore | MOF — Ministry of Finance | MOM — Ministry of Manpower | EnterpriseSG — Enterprise Singapore
This page is a general guide and should not be treated as legal or tax advice. The right approach depends on your specific business activities, revenue, and long-term goals. For advice tailored to your situation, contact Terra Advisory Services.