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Singapore Issues Modified Research e-Tax Guide

by Mary Swire, Lowtax.net, Hong Kong
27 August, 2014

Following the changes announced in February's 2014 Budget, the Inland Revenue Authority of Singapore (IRAS) has published an updated e-Tax Guide on Singapore's research and development (R&D) tax deductions.

IRAS' e-Tax Guide also clarifies the existing definition of R&D and its qualifying criteria, and helps taxpayers to self-assess if their R&D projects are qualifying activities for tax purposes.

The proposed changes introduced in 2014 include an extension of both the additional 50 percent tax deduction for R&D projects for ten years until the 2025 year of assessment (YA), and the tax deduction for Economic Development Board-approved R&D projects until YA2020; while the Writing Down Allowance on a straight-line basis for the acquisition of qualifying intellectual property rights would also be available for a further five years until YA2020.

IRAS emphasized that the R&D measures are targeted at encouraging businesses to build up research capabilities in Singapore. A taxpayer need not apply to any government agency, but may self-assess that his R&D activities are qualifying R&D activities for tax purpose and, if so, make the relevant claims in the annual tax return.

It was also noted that R&D claims for qualifying activities can be made under the Productivity and Innovation Credit (PIC) Scheme. The PIC scheme has also been extended for three years until YA2018, and a PIC+ scheme introduced, under which qualifying small and medium-sized enterprises can claim a 400 percent tax deduction for up to SGD600,000 (USD481,000) of expenditure per qualifying activity per YA.


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