Page 9 - Budget-2018-Highlights-en-flip

CORPORATIONS AND BUSINESSES

Costs Incurred on Protecting Intellectual IP In-licensing Costs
Property
Current
Current
Businesses that have incurred qualifying IP in-
Businesses that have incurred qualifying intellectual licensing costs can claim 100% tax deduction on
property (“IP”) registration costs can claim 100% such costs.
tax deduction on such costs.
Proposed changes
The scheme is scheduled to lapse after YA 2020.
To support businesses in buying and using new
Proposed changes solutions, the tax deduction will be enhanced, from
100% to 200%, for the first $100,000 of qualifying IP
To encourage businesses, in particular the smaller in-licensing costs incurred for each YA.
ones, to register and protect their IPs, the following
were announced: Qualifying IP in-licensing costs include payments
made by a qualifying person to publicly funded
 Extend the scheme till YA 2025; and research performers or other businesses, but
exclude related party licensing payments or
 Enhance the tax deduction to 200% for the first payments for IP where any allowance was
$100,000 of qualifying IP registration costs previously made to that person.
incurred for each YA.
Effective date
Effective date
The change will take effect from YA 2019 to YA
The change will take effect from YA 2019 to YA 2025.
2025.
Comments
Comments
 This is a continuous effort by the Government
 Sound IP protection legislation and regulations in to support and help businesses, especially
Singapore, coupled with the proposed 200% SMEs, in licensing IP rights for innovation or
deduction for IP registration costs for the first productivity improvements after the PIC
$100,000, will go some way towards developing scheme lapses in YA 2018.
Singapore as an international IP hub.

 Extending the life of the scheme and enhancing
deduction for qualifying IP registration costs are
steps in the right direction to encourage SMEs
to consciously build their own innovation
capabilities and at the same time adopt good
practices in registering their IPs so as to ensure
legal title and interest protection.

BUDGET 2018 HIGHLIGHTS | 7