Page 8 - Budget-2018-Highlights-en-flip

CORPORATIONS AND BUSINESSES

Qualifying Expenditure on Qualifying R&D
Projects in Singapore

Current

Businesses that have incurred qualifying
expenditure on qualifying R&D projects performed
in Singapore can claim the following:

 150% tax deduction for staff costs and
consumables incurred, and

 100% tax deduction for other qualifying
expenditure.

Proposed changes

To support businesses to build their own
innovations, the tax deduction for staff costs and
consumables incurred on qualifying R&D projects
performed in Singapore will be increased from 150%
to 250%.

All other conditions of the scheme remain
unchanged.

Effective date

From YA 2019 to YA 2025.

Comments

 The enhancement to the deduction for qualifying
R&D expenditure takes effect from YA 2019,
immediately after the Productivity and
Innovation Credit (“PIC”) scheme lapses in YA
2018.

 The Government continues to encourage R&D
activity from within Singapore and maintain its
push for innovation across different industries.

 It is discouraging however to note that the
changes announced do not include qualifying
R&D expenditure necessarily incurred overseas,
which could possibly be due to the absence of
relevant capabilities in Singapore.

6 | RSM