The corporate income tax rebate for small and medium-sized enterprises (SMEs) in Singapore will increase to 40% in the Year of Assessment (YA) 2026. The government will also provide tax support for companies expanding overseas. 

In his speech, Prime Minister and Finance Minister Lawrence Wong announced that all active companies that employed at least one local staff in 2025 will qualify for a 40% rebate on income tax in YA 2026. If a company is eligible, it will receive a minimum benefit of S$1,500, and the total rebate will be capped at S$30,000. The rebate will be automatically available starting the second quarter of 2026.

Companies must note that this measure will not reduce taxable income, but will reduce the tax payable directly instead. 

In addition to the tax rebate, the government is increasing the funding support under the Market Readiness Assistance Grant. Until March 31, 2029, SMEs will receive 70% funding support, compared to the previous 50%, while support for non-SMEs will remain at 50%.

Changes to the Double Tax Deduction for Internationalism (DTDi) scheme were also introduced. Under this scheme, companies are allowed to claim enhanced tax deductions on eligible expenses related to overseas expansion. The changes include that more activities will qualify for automatic claims under the DTDi and the cap for the qualifying deductions will be raised from S$150,000 to $400,000.