| Part A - Qualifying Conditions for Filing Form C-S |
S/N
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Form C-S Line Item Description |
Notes |
1
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The company's revenue for the financial year is S$1,000,000 or below
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Revenue refers to a company’s main source of income and excludes separate source income such as interest.
Examples:
1) The revenue of an investment company would be its investment income (e.g. dividend income, interest income).
2) The company is in a manufacturing trade and also derives passive income such as interest. The revenue would be the income derived from its manufacturing trade.
3) For a service company, the revenue is to be determined as follows:
- Where the services are provided free or at cost to related parties, the revenue is the cost recovered from related parties.
- Where services are provided at cost plus mark-up, the revenue is the cost plus mark-up.
- Where the services are provided at arm’s length price, the revenue is the service income or management fees received.
If you are newly-incorporated and filing tax based on your first set of financial accounts covering a period of more than 12 months, you are considered to have met this qualifying condition if the revenue for the 12-month period ending on your financial year-end is $1,000,000 or less. For example, if a company was incorporated on 15 Apr 2010 and its first set of financial accounts closed on 30 Jun 2011, the relevant revenue amount for the qualifying condition is the amount from 1 Jul 2010 to 30 Jun 2011 and if it is $1,000,000 or less, it would have met the qualifying condition. Please also see Note 2.
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2
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For Newly Incorporated Companies filing its first Tax Return
The financial accounts on which this filing is based, covers a period of more than 12 months from the date of incorporation
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If you are filing tax based on your first set of financial accounts covering a period of more than 12 months, please select “Yes” for this line item.
Please refer to Newly Incorporated Companies that are Filing the First Tax Return for details on how to complete Part B of Form C-S.
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| Part B - Tax Adjustments |
S/N
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Form C-S Line Item Description |
Notes |
3
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Q1. If the tax computation and accounts are maintained in a currency other than the Singapore dollars, how do I complete Parts B and C of Form C-S to show that the currency is not Singapore dollars?
Form C-S should be completed in Singapore dollars and not in the foreign currency. Please refer to the e-Tax Guide “Filing of Income Tax Computations in Functional Currencies other than Singapore Dollars” for details.
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4
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Separate Source Income
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This refers to income not from your principal activity or trade.
Examples are rent from real property, fixed deposit interest and other non-trade taxable income. Such income must be completed in the Form C-S line items “Gross Rental Income, Interest Income and Other Income”, where applicable.
It excludes exempt one-tier dividend income which should be included in the Form C-S line item “Non-Taxable Receipts” as it is not taxable.
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5
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Non-Taxable Receipts
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Examples are exempt one-tier dividend income and gain on disposal of fixed assets.
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6
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Non-Tax Deductible Expenses |
Non-tax deductible expenses refer to expenses that are:
- not wholly and exclusively incurred in the production of income; or
- not revenue in nature; or
- prohibited under the Income Tax Act.
Examples are depreciation, donations, fines and penalties, private expenses, S-plate car expenses, expenses incurred to produce separate source income and non-taxable receipts and expenses attributable to non-income producing assets such as interest.
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7
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Deduction for Renovation or Refurbishment (R&R) Works under Section 14Q |
Examples of R&R works are general electrical installation and lighting, door, window, fixed partition, flooring and wall covering, provided they do not involve structural changes for which prior approval from Commissioner of Building Control is required. Designer and professional fees are not to be included.
Deduction will be granted on a straight-line basis over three consecutive YAs and subject to an expenditure cap of $150,000 for every three consecutive basis periods.
Q1. My company incurred qualifying R&R costs of $60,000 in YA 2012. These costs were capitalised in the Balance Sheet under “Plant, Property and Equipment”. Assuming no R&R costs were claimed previously, how do I compute the amount of tax deduction for YA 2012?
A deduction of $20,000 ($60,000 / 3 years) will be allowed in YA 2012. As such, please complete this line item with the amount of $20,000.
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8
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Enhanced Deductions under Productivity and Innovation Credit (PIC) Scheme
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Under the PIC scheme, you can deduct an additional 300% (250% for research and development conducted in Singapore) of your qualifying expenditure in the six activities. The enhanced deduction is subject to a combined expenditure cap of $800,000 for YA 2011 and YA 2012 for each activity. For newly-incorporated companies whose first YA is YA 2012, the expenditure cap for YA 2012 is $400,000 for each activity.
From YA 2012, in-house training not certified by the Singapore Workforce Development Agency (WDA) or Institute of Technical Education (ITE), subject to an expenditure cap of $10,000 per year, will qualify for PIC. The claim must be within the expenditure cap for training.
You can also convert up to a combined cap of $200,000 of qualifying expenditure for all six activities for YA 2011 and YA 2012, into a non-taxable cash payout of up to $60,000 ($200,000 x 30%). For newly-incorporated companies whose first YA is YA 2012, the expenditure cap for conversion for YA 2012 is $100,000. Expenditure which has been converted into cash payout cannot be claimed as a tax deduction.
Q1. My company incurred $500,000 on external training course fees in YA 2012. No PIC benefits on staff training were claimed in YA 2011. How should I complete this Form C-S line item?
Please complete this line item with the amount of $1,500,000 (300% x $500,000).
The qualifying cost of $500,000 should also be completed in Part C of Form C-S under the line item “Productivity and Innovation Credit Scheme – External and Certified In-house Training”.
Q2. My company paid $450,000 to a research and development (R&D) organisation to conduct qualifying R&D activities in Singapore on behalf of my company.
My company is claiming 60% of the fees under PIC for YA 2012. No PIC benefits on R&D were claimed in YA 2011. How should I complete this Form C-S line item?
Please complete this line item with the amount of $675,000 (250% x 60% x $450,000).
The qualifying cost of $270,000 (60% x $450,000) should also be completed in Part C of Form C-S under the line item “Productivity and Innovation Credit Scheme – Research and Development Activities”.
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9
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Further Deductions
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Examples of expenditure qualifying for further deductions are:
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10
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Balancing Charge
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When a fixed asset is sold or written off, balancing charge (BC) or balancing allowance (BA) must be calculated if capital allowance has been claimed on the asset previously.
A taxable BC arises if the sale proceeds amount is higher than the tax written down value. The taxable BC is restricted to the capital allowances allowed on the asset previously.
A deductible BA, arises if the sale proceeds is lower than the tax written down value, should be included in the Form C-S line item “Current Year Capital Allowances”.
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11
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Unutilised Capital Allowances brought forward
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Enter the Unutilised Capital Allowances carried forward figure from the YA 2011 Notice of Assessment (if it is issued) or from the YA 2011 tax computation.
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12
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Current Year Capital Allowances
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Capital allowances are deductions in lieu of depreciation of fixed assets bought and used in your trade or business.
This box should include the following if they are claimed:
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13
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Enhanced Allowances under Productivity and Innovation Credit (PIC) Scheme
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You can deduct an additional 300% of allowances on the acquisition expenditure of PIC automation equipment and intellectual property rights, subject to the same expenditure cap explained in Note 8.
Expenditure which has been converted into cash payout cannot be claimed as tax allowances.
Q1. The company spent $300,000 in YA 2012 to purchase computers that qualify for enhanced allowances under PIC. No PIC benefits on PIC Automation Equipment were claimed in YA 2011. How should I complete this Form C-S line item?
This Form C-S line item should be completed with the amount of “$900,000” (300% x $300,000).
Please also complete the following Form C-S line items with the amount of $300,000:
- Line item “Current Year Capital Allowances”; and
- Part C of Form C-S under the line item “Productivity and Innovation Credit Scheme – PIC Automation Equipment”.
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14
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Unutilised Losses brought forward
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Enter the Unutilised Losses carried forward figure from the YA 2011 Notice of Assessment (if it is issued) or from the YA 2011 tax computation.
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15
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Gross Rental Income
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Enter the total rental income for the financial year ended in 2011.
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16
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Less: Deductible Expenses
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This refers to revenue expenses directly incurred to earn the rental income. Examples are interest on loan to acquire the property, insurance, property tax, repair and maintenance.
Expenses (e.g. agent’s commission) incurred to secure the first tenant are not tax-deductible.
For investment holding companies, deductible expenses include statutory expenses attributable to the rental income. This line item excludes industrial building allowances (IBA) and land intensification allowances (LIA), which should be included in the Form C-S line item “Current Year Capital Allowances”.
Q1. My company claimed IBA/LIA against its rental income for YA 2012 as follows:
| Gross rental income |
= $ 200,000 |
| Less: Deductible expenses |
= $ (80,000) |
| Net rent before IBA/LIA |
= $ 120,000 |
| Less: IBA/LIA |
= $(150,000) |
| Net rental deficit |
= $ (30,000) |
How should I complete Form C-S in this scenario?
The gross rental income of $200,000 should be completed in the Form C-S line item “Gross Rental Income”.
The deductible rental expenses of $80,000 have to be completed in the Form C-S line item “Less: Deductible Expenses”.
The IBA/LIA claim of $150,000 should be included in the Form C-S line item “Current Year Capital Allowances”.
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17
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Interest Income
Other Income
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If net income is negative, enter ‘0’. Expenses in excess of income cannot be deducted against the trade income or carried forward.
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| Part C - Information from Financial Statement |
S/N
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Form C-S Line Item Description |
Notes |
18
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Q1. Where a company has branches overseas, should Part C be completed on the basis of the company's Singapore operations only, or the consolidated results as reflected in the audited accounts?
Balance sheet items are to be completed based on the consolidated results. Profit and loss account items are to be completed based on the results of the Singapore operation.
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19
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Revenue
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This refers to the company's main source of income excluding separate source income such as interest.
Note: The revenue amount will be used for computing the SME Cash Grant, where applicable.
Examples:
1) The revenue of an investment company would be its investment income (e.g. dividend income, interest income).
2) The company is in a manufacturing trade and also derives passive income such as interest. The revenue would be the income derived from its manufacturing trade.
3) For a service company, the revenue is to be determined as follows:
- Where the services are provided free or at cost to related parties, the revenue is the cost recovered from related parties.
- Where services are provided at cost plus mark-up, the revenue is the cost plus mark-up.
- Where the services are provided at arm’s length price, the revenue is the service income or management fees received.
4) For a newly-incorporated company where the first set of account is more than 12 months from the date of incorporation, the revenue amount is to be completed as follows:
- Breakdown of revenue applicable to YA 2011 (for SME cash grant purposes) - To provide the revenue for YA 2011 (time basis of apportionment can be used) to enable IRAS to compute the SME cash grant for YA 2011;
- Revenue - To complete with the amount shown in the financial accounts for the whole financial period.
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20
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Gross Profit/Loss
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This refers to the amount after taking into account the cost of goods sold. If there is no cost of goods sold, the gross profit should be the same amount as the revenue.
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21
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Directors' Fees and Remuneration
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This refers to all fees and payments made to directors, e.g. salaries, leave pay, commissions, bonuses, gratuities, allowances, CPF; excluding benefits-in-kind, medical expenses and cash allowances in lieu of medical expenses.
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22
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Total Remuneration excluding Directors' Fees and Remuneration
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This refers to total employees’ remuneration but excludes the figure entered in the Form C-S line item “Directors’ Fees and Remuneration”.
Remuneration include salaries, leave pay, commissions, bonuses, gratuities, allowances, CPF; excluding benefits-in-kind, medical expenses and cash allowances in lieu of medical expenses.
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23
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Medical Expenses (Enter the deductible amount)
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This refers to deductible medical expenses incurred in or in connection with the provision of medical treatment, including cash allowance in lieu of medical expenses, and medical insurance.
Deductible medical expenses are capped at 1% of remuneration. However, the cap is at 2% of remuneration if you have:
- provided your employees with inpatient medical insurance benefits in the form of a Portable Medical Benefits Scheme (PMBS), a Transferable Medical Insurance Scheme (TMIS) or a Shield plan; or
- made ad-hoc contributions to your employees’ Medisave accounts (subject to $1,500 cap per employee per year) during the relevant basis period; and
- met the qualifying conditions under the respective scheme/plan.
Q1. My company incurred medical expenses of $8,000 in YA 2012. The company has implemented PMBS and its total employee remuneration for YA 2012 is $300,000. How do I compute the amount of medical expenses that are tax deductible?
The amount of medical expenses that are deductible (capped at 2% of total employee remuneration) is $6,000 (2% x $300,000).
As such, please complete this line item with “$6,000”.
The non-deductible amount of $2,000 ($8,000 - $6,000) is to be completed in the Form C-S line item “Non-Tax Deductible Expenses”.
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24
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Transport/Travelling Expenses
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Q1. What is the definition of transport/travelling expenses? Does it include motor vehicle expenses?
Please fill in the amount as reflected in your profit & loss statement. It is not necessary to exclude your motor vehicle expenses if they are included in the transport/travelling account.
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25
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Approved Donations made during the financial year
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Q1. Must I submit original donation receipts?
Original donation receipts need not be submitted. They are to be retained and submitted to IRAS only upon request.
Q2. What is the amount to be declared?
If your company’s financial year began on or after 1 Jan 2011 (e.g. 1 Jan 2011 to 31 Dec 2011), there is no need to declare the donation amount in Form C-S as the tax deduction for approved donations made in 2011 will be automatically reflected in the company’s tax assessment based on information from the Institution of a Public Character (IPC). As such, please enter “0” for this line item.
If your company’s financial year began before 1 Jan 2011 (e.g. 1 Apr 2010 to 31 Mar 2011), the company is required to enter 2.5 times the amount of approved donations made during the financial year for this line item.
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26
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Inventories
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Enter the gross amount of inventories. If the gross amount is not available in the financial accounts, please enter the amount net of provision.
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27
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Trade Receivables
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Enter the gross amount of trade receivables, including related party trade debts. If the gross amount is not available in the financial accounts, enter the amount net of provision.
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28a
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Deduction of Unutilised Capital Allowances/ Losses/Donations Brought Forward -
Substantial change in shareholdings
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You can deduct unutilised capital allowances/losses/donations incurred in a previous year against income in the current year if there is no substantial change in the ultimate shareholders and their shareholdings as at the relevant dates.
There is no substantial change if the shareholding (%) of common shareholders as at the last day of the YA in which the capital allowances arose/last day of the year in which the losses and donations were incurred; and as at the first day of the YA (e.g. 1 Jan 2012) in which utilisation occurs, is 50% or more.
If there is a substantial change in shareholders and their shareholdings, you may write to IRAS to apply for waiver of the above shareholding test.
Applications for waiver of the shareholding test will be considered based on the merits of each case and granted if the substantial change in shareholders is not tax-motivated.
Where waiver of the shareholding test has been granted, the unutilised capital allowances/trade losses/donations (which would otherwise not be deductible) can be deducted only against profits derived from the same trade/business in respect of which they arose.
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28b
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Change in principal activities
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To deduct unutilised capital allowances brought forward, there must also not be a change in your principal activities.
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29
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Tax Exemption Scheme for New Start-up Companies -
Qualifying conditions
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The scheme provides for tax exemption to new start-ups for each of their first 3 consecutive YAs:
- full exemption on the first $100,000 of normal chargeable income*
- 50% on the next $200,000 of normal chargeable income*
To qualify, a company must:
- be incorporated in Singapore (including companies limited by guarantee);
- be a tax resident in Singapore for that YA; and
- have no more than 20 shareholders throughout the basis period for that YA where:
- all the shareholders are individuals beneficially and directly holding the shares in their own names; or
- at least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.
* Normal chargeable income refers to income to be taxed at prevailing corporate tax rate.
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30a
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Productivity and Innovation Credit (PIC) Scheme -
PIC Automation Equipment
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Costs incurred to acquire or lease PIC automation equipment.
Examples of PIC automation equipment are fax machine, laser printer, computer, laptop, software.
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30b
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External and Certified In-house Training
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Costs incurred on external training and in-house training for employees certified by the Singapore Workforce Development Agency (WDA) or Institute of Technical Education (ITE).
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30c
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Intellectual Property Rights Acquisition |
Costs incurred to acquire IPRs for use in the trade or business, excluding EDB-approved IPRs and IPRs relating to media and digital entertainment contents granted an accelerated 2-year write-down.
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30d
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Patents, Trademarks, Designs & Plant Varieties Registration
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Registration costs are official fees and professional fees incurred in relation to the registration of patents, trademarks, designs and plant varieties.
An example is fee paid to the Intellectual Property Office of Singapore (IPOS) to register a trademark.
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30e
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Research and Development Activities
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Costs incurred on staff costs and consumables for qualifying R&D activities carried out in Singapore or overseas. Examples are salaries for R&D personnel and fees paid to an R&D institute for creating a novel product.
R&D done overseas must be related to the trade or business in Singapore.
Please submit the Research & Development Claim Form.
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30f
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Approved Design Projects
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Costs incurred on staff costs of qualified designers for approved industrial or product design projects conducted primarily in Singapore.
Examples of qualifying expenditure are salaries for qualified in-house designers and fees paid to an approved design service provider for an approved design project.
The project must be approved by the DesignSingapore Council .
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31
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YA 2012 SME Cash Grant For Companies |
To be eligible for the cash grant, the company must have made CPF contributions for at least one employee who was not a shareholder of the company during the financial year ended in 2011.
The SME Cash Grant is pegged at 5% of a company’s revenue (as declared in the Form C-S line item “Revenue”), subject to a cap of $5,000.
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