Substantial changes to the scheme effective from 2018, most notably a significant increase in generosity (with superdeduction increasing from 50% to 150%
Singapore all companies
150% superdeduction for eligible costs, though the specific costs that can be included are quite constrained. At the main rate tax rate of 17% (exemptions for v low profits) this gives a benefit of 25.5%
Eligible Claim Period
3 Year of assessments, including current YA (hence 2 historic yrs).
Various discretionary incentives have existed for decades, but a statutory scheme was introduced as a superdeduction in 2009. There have been various adjustments since then.
Substantial changes to the scheme effective from 2018, most notably a significant increase in generosity (with superdeduction increasing from 50% to 150%).
Ease of Application
Company makes claim via Form C-S; this is fairly self-explanatory but requires an overview, documentation, and separate quantification for each project included in the claims.
A company may directly request review by the ‘Technical Panel’ of scientific experts; this is also automatic after two rounds of correspondence with IRAS.
Regulating Body Policies
Details of each project, including a summary of the R&D undertaken and a quantification of each cost, must be provided in the Form C-S.
Each claim is reviewed by IRAS (not clear the level of scrutiny)
IRAS is open to less stringent documentation for smaller businesses and claims.
IRAS has recently introduced the “R&D Assurance Framework” as a mechanism to get certainty for 3 years at once; subject to a minimum number of projects and expenditure.
60% of ‘contracted out’ costs.
Issues to Consider
R&D must take place in Singapore to be eligible for superdeductions. Overseas activity is deductible at 100% (without superdeduction) but only if it is related to the trade.
Any grants received (and there are a lot available in Singapore) must be deducted from QE.
No payable credits, so lossmaking companies do not gain a cash benefit.