Singapore

Tax Incentives for Innovation 

Governments the world over have been rolling out incentives to encourage businesses to build competitive advantage through research and development. In most countries, research and development tax incentives are broadly available and applicable to every industry. A good understanding of research and development tax incentives can therefore lead to tax savings for your business.
R&D incentives in Singapore

The Singapore government's focus towards productivity and innovation-led economic growth has resulted in significant changes to Singapore's research and development tax regime. In view of this focus, significant incentives have been rolled out. The key R&D tax incentive is as follows:

With effect from the Year of Assessment 2011, qualifying expenditure on R&D activities will generally be eligible for the following concession:

  • 400 percent tax deduction for the first $400,000 of expenditure for R&D done in and outside Singapore; and
  • 150 percent tax deduction on the remainder expenditure for R&D done in Singapore


R&D activities may be found in the following industries:

Food & Beverage

  • Development of new food and beverage products
  • Improved packaging or packaging processes
  • Ingredient substitution without compromising product quality
  • New or improved manufacturing processes to reduce waste or to increase output
  • Increasing the shelf-life of existing products
  • Improved storage techniques


Industrial Automation

  • Control system development for increased functionality, safety, reliability or productivity;
  • Customisation of existing automation technology according to a specific client need, to create a new or enhanced product or process;
  • Enterprise information automation to translate manufacturing data into business information;
  • Industrial equipment development to automate heavy lift processes;
  • Development of a data management system to enable workflow and integration across multiple disparate systems.


Media

  • Development of online platforms for interacting with customers
  • Improved graphical or audio capabilities
  • Integration of disparate technologies
  • Development of systems to enable real-time data flow
  • Re-versioning of traditional media formats for online and mobile streaming
  • Development or improvement of games engines


Offshore and Marine

  • Design of specialised vessels
  • Shipbuilding/construction techniques
  • Processes to enhance productivity or safety
  • Use of environmentally-friendly materials
  • Model testing techniques
  • Computational Mechanics
  • Engineering Visualisation
  • Predictive Maintenance


Real Estate and Construction

  • Construction techniques which reduce building costs and construction time for developments
  • Processes to enhance productivity or safety
  • Use of environmentally-friendly materials
  • Critical technical processes that enable the green retro fit of buildings or improvements in energy and water efficiency
  • Technical design processes for specialised structures






R&D incentives around the world

Governments the world over have recognised the need to invest in research and development to generate sustainable economic growth. The main form of incentive is in the form of enhanced tax deductions or a tax credit. Most regimes try to offer the incentives to all industry.

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Contact us

Chiu Wu Hong
Head of Enterprise Incentive Advisory

+65 6213 2569

tax@kpmg.com.sg


Harvey Koenig
Partner, Enterprise Incentive Advisory

+65 6213 7383

tax@kpmg.com.sg