Singapore Research & Development (R&D) Tax Measures: A Detailed Guide

Singapore offers a range of tax measures to encourage businesses to undertake Research & Development (R&D) activities. At Apexia Corporate Advisory, we specialize in helping companies leverage these tax benefits to drive innovation and growth. This guide provides an overview of the available tax measures and how your business can qualify for them.

What is Qualifying R&D?

To qualify for R&D tax deductions, your project must meet the following criteria:

• Objective: The project must aim to acquire new knowledge, create new products or processes, or improve existing ones.
• Novelty: The project must involve something new, such as a first-of-its-kind process or product in Singapore.
• Technical Risk: The project must address scientific or technological uncertainty that cannot be readily resolved by a competent professional.
• Systematic Study: The project must involve a systematic, investigative, and experimental (SIE) study in a field of science or technology.

R&D Tax Benefits

Singapore's R&D tax measures include the following deductions:

• 100% Tax Deduction: For qualifying R&D expenditure under Section 14C of the Income Tax Act (ITA).
• Additional Deduction: Up to 150% for qualifying staff costs and consumables under Section 14D of the ITA.

Taxpayers can also claim capital allowances on plant and machinery used for R&D purposes under Sections 19 and 19A of the ITA.

Qualifying R&D Expenditures

Qualifying expenditures include:

• Staff costs related to R&D activities.
• Consumables used in the R&D process.
• Costs of outsourcing R&D activities to approved R&D service providers.

Documentation Requirements

To substantiate R&D claims, businesses should maintain detailed records, including:

• R&D project plans and objectives.
• Evidence of scientific or technological uncertainty addressed by the project.
• Systematic records of experiments, results, and conclusions.
• Invoices and receipts for R&D-related expenses.

Administrative Process

To claim R&D tax benefits:

• Submit the completed R&D Claim Form along with the Income Tax Return (Form C-S/ Form C).
• Maintain all supporting documentation for audit purposes.
• Ensure that claims for additional deductions are substantiated with detailed invoices and agreements.

How Apexia Corporate Advisory Can Help

At Apexia, we offer end-to-end support to help businesses optimize their R&D tax claims. Our services include:

• Evaluating the eligibility of R&D projects.
• Preparing and submitting accurate R&D tax claims.
• Providing guidance on compliance with IRAS' requirements.
• Ensuring proper documentation for audit-readiness.

With our expertise, your business can focus on innovation while we ensure you maximize the tax benefits available for your R&D efforts.