Singapore Land Intensification Allowance (LIA): A Detailed Guide

The Land Intensification Allowance (LIA) is a tax incentive introduced by the Singapore government to encourage the intensification of industrial land use. Apexia Corporate Advisory is here to guide you through the eligibility and application process to maximize your benefits under the LIA scheme.

What is the Land Intensification Allowance?

The Land Intensification Allowance (LIA) provides businesses with additional tax deductions on qualifying capital expenditure incurred for the construction or renovation of qualifying buildings or structures. The allowance aims to encourage companies to optimize land use for industrial purposes.

Eligibility Criteria

To qualify for the LIA, businesses must meet the following conditions:

• The business must be carrying out qualifying activities under the LIA scheme, such as manufacturing, logistics, or certain warehousing activities.
• The building or structure must meet the Gross Plot Ratio (GPR) benchmark specific to the industry.
• The company must incur qualifying capital expenditure for the construction or renovation of the building or structure.
• The application for LIA must be submitted and approved by the Economic Development Board (EDB) before the capital expenditure is incurred.

Qualifying Capital Expenditure

The following costs may qualify for the LIA:

• Cost of construction or renovation of the qualifying building or structure
• Expenditure on structural works or improvements
• Professional fees related to the construction or renovation

Allowance Rates

The LIA provides an initial allowance and an annual allowance:

• Initial Allowance: 25% of the qualifying capital expenditure is granted in the year the expenditure is incurred.
• Annual Allowance: 5% of the qualifying capital expenditure is granted annually on a straight-line basis, starting from the year the building or structure is put to use.

Application Process

To apply for the LIA, businesses must:

• Submit an application to the Economic Development Board (EDB) before incurring the qualifying capital expenditure.
• Provide detailed documentation, including plans and specifications of the building or structure, estimated costs, and evidence of meeting the GPR benchmark.
• Obtain EDB's approval for the LIA before proceeding with the project.

Documentation Requirements

To support your LIA claim, ensure you maintain the following records:

• Approved application documents from EDB
• Invoices and payment receipts for qualifying expenditure
• Construction contracts and professional fee agreements
• Evidence of the building or structure meeting the GPR benchmark

How Apexia Corporate Advisory Can Help

At Apexia, we specialize in assisting businesses with their LIA applications and claims. Our services include:

• Assessing eligibility for the LIA scheme
• Preparing and submitting applications to the EDB
• Ensuring compliance with GPR benchmarks and other requirements
• Supporting documentation preparation for tax claims

With our expertise, you can focus on your business operations while we ensure your tax incentives are maximized.