Under the normal carry-back relief scheme, current year unabsorbed capital allowances and trade losses (collectively referred to as ‘qualifying deductions’) may be carried back to the immediate preceding year of assessment (YA). In last year’s Budget, the carry-back relief scheme was enhanced to allow the qualifying deductions for YA 2020 to be carried back up to three immediate preceding YAs, subject to conditions.
The enhanced carry-back relief scheme will be extended to apply to qualifying deductions for YA 2021. With this extension, qualifying deductions for YA 2021, subject to conditions, may be carried back up to three immediate preceding YAs. As the amount of qualifying deductions that can be carried back remains capped at S$100,000 (approximately US$74,460), this measure will benefit smaller businesses the most.