Continuation from previous posts. Tax incentives offered to the R&D Industry.
INVESTMENT INDUSTRY
1. Enterprise Investment Incentive - Start-up companies engaged in innovative and high-growth activities with substantial R&D content in relation to a specific product, process or service. Overseas start-ups may also be approved on a case-by-case basis. Deductions of losses incurred on disposal of shares or liquidation
2. Overseas Enterprise Incentive - This incentive is designed to encourage companies to invest in approved overseas investments and projects. Tax exemption on qualifying instruments
R&D INDUSTRY
1. Enhanced R&D Deductions - The enhanced deductions for R&D are not limited to businesses whose core activity is research but also for any businesses that demonstrate projects meeting the R&D definitions as follows:
i. conduct of a study in a systematic, investigative and experimental manner.
ii. Involves novelty or technical risks in the field of science or technology.
iii. Object of study includes production or improvement of materials, devices, products, produce or processes.
2. Companies with projects meeting the R&D definition are allowed enhanced deductions as follows:
i. 400% tax deduction for the first $400,000 of qualifying expenditure incurred on R&D done in Singapore, or overseas R&D which is related to an existing trade or business.
ii. 150% tax deduction for the balance qualifying expenditure incurred on R&D done in Singapore.
iii. 100% tax deduction for the balance of all other R&D expenditure, including expenditure incurred on overseas R&D which is related to an existing business.
3. 400% tax deduction on first $400,000 for R&D done in Singapore / 150% tax deductions on balance qualifying expenditure for R&D done in Singapore / 100% tax deductions on balance for R&D expenditure.
PRODUCTIVITY AND INNOVATION CREDIT (PIC) SCHEME
1. Investments in Approved Design
i. 400% tax deduction for the first $400,000 of qualifying expenditure incurred on eligible design activities done in Singapore on year of assessment.
ii. 100% tax deduction for the balance of expenditure.
iii. Tax incentive is must be applied through and is administered by the DesignSingapore Council.
2. Acquisition of Intellectual Property
i. 400% allowance for the first $400,000 of qualifying expenditure.
ii. 100% allowance for the balance expenditure.
3. Registration of Intellectual Property
i. 400% allowance for the first $400,000 of qualifying expenditure incurred on the registration of patents, trademarks, designs and plant varieties.
ii. 100% allowance for the balance expenditure.
4. Investments in Automation Equipment
i. 400% allowance or tax deduction for the first $400,000 of expenditure incurred on qualifying investments in automation.
ii. 100% allowance or tax deduction for the balance of expenditure.
iii. Qualifying investments in automation is based on the list of automation equipment as prescribed in the “PIC Automation Equipment List” published by the IRAS.
5. Training
i. 400% deduction for the first $400,000 of qualifying training expenditure incurred on all external training courses, and in-house training courses approved by the Workforce Development Agency (WDA) and the Institute of Technical Education (ITE).
ii. 100% tax deduction for the balance of expenditure.
6. For each qualifying activity, the following combined expenditure cap would apply:
i. $800,000 for years of assessment 2011 and 2012
ii. $1,200,000 for years of assessment 2013 to 2015
(Source: rikvin)
