Tax deductions are granted to encourage pervasive R&D in Singapore and to build innovative capabilities of our people and businesses. The R&D scheme has benefitted many businesses. In 2016, about 770 companies had claimed enhanced R&D benefits. Small and Medium Enterprises (SMEs) comprise the majority of R&D beneficiaries, making up 85% of R&D claims.

Based on the R&D claims processed, 74% of the SME claims were granted full R&D benefits, with another 7% of the claims adjusted by IRAS on the approved expenditure (for example, a portion of the R&D project may not meet the R&D eligibility criteria) and the remaining 19% of the claims did not meet the R&D criteria.

How the claim process works

claimprocess

1 Please note that you need not submit any information/ supporting documents with the Income Tax Return (Form C-S/ C) but you are required to prepare and retain proper documentation from the start of the R&D project and present it to IRAS upon request.

Companies filing Form C: Please complete the Research and Development (R&D) Claim Form (YA 2018 and before) (188KB) Revised! or Research and Development (R&D) Claim Form (YA 2019 and onwards) (234KB) Revised! and submit it together with the company's Form C.

Companies filing Form C-S: Please retain the completed R&D Claim Form and submit it to IRAS upon request. The relevant documents/ information must be retained for a period of at least five years from the relevant YA. These documents/ information should be submitted to the Comptroller of Income Tax upon request. For more information on record keeping, please refer to Business Records That Companies Must Keep.

Companies e-Filing Cash Payout Application Form: Please complete the Research and Development (R&D) Claim Form (YA 2018 and before)  (188KB) Revised! and upload it at the Summary Page when submitting the company's PIC Cash Payout Application Form.

2 IRAS may consult IPOS International Pte Ltd (IPOS-I), a wholly-owned subsidiary of the Intellectual Property Office of Singapore (a statutory board under the Ministry of Law), in its review of R&D applications.

3 For more information, please refer to Technical Advisory Panel and How the referral process works.

R&D Documentation

A taxpayer must maintain proper documentation of its R&D projects, so that it can substantiate its R&D claims to IRAS when requested. Please maintain such documentation from the start of the R&D project, rather than as an after-event.

Some information that will help to substantiate R&D claims:

   Examples of information / documentation that can substantiate R&D claims
Objective 
  • Explanation of how the R&D project goes beyond the current state of technology and knowledge
  • Records of enquiries / research done on the current state of technology / knowledge and the results
Novelty
  • Press statements, marketing materials or website information stating that the product is new in Singapore
  • Award of a patent resulting from the R&D
Technical Risk
  • Explanation of the scientific or technological uncertainty involved and why it could not be readily resolved by a competent professional before the start of the R&D project 
SIE Study
  • Records of challenges and why they could not be resolved without undertaking a SIE study
  • Design of your experimental process, including your potential solution
  • Test results
  • Record of steps taken to improve the chances of success for subsequent attempts

More examples of helpful documentation can also be found in Research and Development Tax Measures (e-Tax Guide, 1.59MB) and Documents to Prepare when Filing Form C-S/ C.

Smaller businesses may not always formally document the steps of their R&D projects. In such cases, IRAS is prepared to accept other forms of documentation that the business has to substantiate its claim. Such documentation may include (but are not limited to) working papers, email discussion, test result scripts etc. SMEs can contact IRAS if they need clarifications on the requisite documentation.

Technical Advisory Panel

IRAS has set up a Technical Advisory Panel ("Panel") to advise IRAS and enhance IRAS' ability to review R&D applications and expenditures on automation equipment for the purpose of R&D tax benefits and the Productivity and Innovation Credit ("PIC") scheme. The members of the Panel are Dr Lee Kwok Cheong (Chairman), Prof. Chou Siaw Kiang, Dr Zhou Yi, Dr Ong Kheng Chuan Peter, Mr Chew Chee Bin, Mr Sherman Tan, Dr Josephine Kwa, Prof. Chiew Sing-Ping, Prof. Freddy Boey and Dr Sze Tiam Lin.

How the referral process works

Flowchart - Referral Process

R&D cases will be referred to the Panel when:

  • Taxpayer requests for the referral specifically; or
  • IRAS rejects the R&D claim after two rounds of review and the taxpayer wishes to pursue the claim.

For cases referred to the Panel, a summary of the project, taxpayer's views, IRAS' evaluation,  supporting documents provided by taxpayer and IRAS' correspondence with the taxpayer will be submitted to the Panel for review.

While the Panel will generally advise IRAS based on the documents provided, the Panel may request for further clarifications from the taxpayer on the R&D claims before providing technical advice to IRAS. In such instances, IRAS will usually collate the questions and seek clarifications from the taxpayer.

The Panel can also request to meet the taxpayer to seek further clarifications directly on the R&D claims. The meeting is solely for clarifications on R&D claims and is not an arbitration session. If the taxpayer is unable to meet the Panel, IRAS will continue to liaise with the taxpayer on the clarifications sought.

With the technical advice from the Panel, IRAS makes the final decision on the taxpayer's claims for R&D tax benefits and PIC scheme.

Pre-claim Evaluation of R&D Projects

To provide upfront certainty for R&D claims, IRAS has implemented a Pre-claim Evaluation scheme for large and complex R&D projects. This is a structured evaluation process which allows taxpayers to submit details of their R&D projects to IRAS for evaluation before the commencement or during the conduct of the projects. Large and complex projects are defined as those projects with estimated R&D costs exceeding $15 million.

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