A landmark initiative designed to strengthen cross-border cooperation with the establishment of a one-stop centre to facilitate investments
and businesses, the Johor-Singapore Special Economic Zone (JS-SEZ) aims to create 20,000 skilled jobs and facilitate the expansion of 50
projects in the first five years, and 100 projects within the first decade. Spanning over 3,500 square kilometres, JS-SEZ is approximately
four times the size of Singapore and comprises nine flagship zones, each focused on specific key sectors.
To keep tax professionals abreast of this significant development, the Singapore Chartered Tax Professionals hosted a
webinar featuring four distinguished tax advisors from both sides of the Causeway. Together, the panel shared valuable insights into key
tax considerations for companies and provided attendees with much to think about.
“To capitalise on the opportunities arising from JS-SEZ, it is critical for Singapore companies to think through the various tax
considerations from the outset: What are the tax incentives available and their qualifying conditions? How can the company optimise the
supply chain taking into account transfer pricing considerations? What would employment in JS-SEZ mean to Singaporean employees from an
individual tax perspective? These are just a few of the many tax considerations for Singapore companies embarking on their JS-SEZ
journey,” they highlighted.
KEY TAKEAWAYS
Companies operating in qualifying sectors can apply to the Malaysian Investment Development Authority for the various tax incentive
schemes under the JS-SEZ Tax Incentives Package.
Due to the proximity of the JS-SEZ, there may be a tendency for a Singapore company to send its employees to oversee the setting up of the
Malaysian entity within the JS-SEZ. This could potentially lead to permanent establishment exposure for the Singapore company.
Under the JS-SEZ incentives package, knowledge workers are eligible for a 15% flat tax rate on chargeable employment income for a period
of 10 years.
Conclusion
The JS-SEZ offers a transformative platform for businesses to harness the synergies between Singapore and Malaysia, driving innovation and
growth. As we await further guidance on the JS-SEZ Tax Incentives Package, it is crucial for businesses to stay informed and integrate
comprehensive tax considerations into their decision-making processes, enabling them to capitalise on the opportunities presented by the
JS-SEZ while positioning themselves for long-term success.
Note: Information on the JS-SEZ Tax Incentives Package found in this article is accurate as of 12 February 2025
Considering corporate income tax.
As we await further guidance on the JS-SEZ Tax Incentives Package, it is crucial for businesses to stay informed and integrate
comprehensive tax considerations into their decision-making processes. Contact us to discuss your transfer pricing and multinational
tax compliance requirements.