The EIS was announced in Budget 2023. Besides enhancement to existing tax measures and the introduction of a new tax measure, the EIS also enables eligible businesses to opt to convert up to $100,000 of total qualifying expenditure for each Year of Assessment (YA) into cash at a conversion rate of 20%. Learn more about the EIS (PDF, 588KB).

On this page:

Qualifying Period of the EIS

The EIS is available for YA 2024 to YA 2028.

How the EIS Benefits You

Tax Deductions/ AllowancesCash Payout

1. 400% tax deductions/ allowances on up to $400,000 of qualifying expenditure per year for each of the 4 qualifying activities:

2. 400% tax deductions on up to $50,000 of expenditure per year for:

Option to convert1 up to $100,000 of the total qualifying expenditure across all the qualifying activities for each YA into a non-taxable cash payout (PDF, 137KB) at a conversion rate of 20%, in lieu of tax deductions and/ or allowances.  

1 Specific conditions apply to the conversion of qualifying expenditure incurred under “registration of IPs” and “acquisition and licensing of IPRs”.

Qualifying Conditions

Only sole-proprietorships, partnerships, companies (including registered business trusts), registered branches and subsidiaries of a foreign parent or holding company are eligible for EIS enhanced tax deductions/ allowances and Cash Payout. The qualifying conditions are summarised in the table below:

Enhanced Tax Deductions/ AllowancesEIS Cash Payout

 

  • Carry on active business operations in Singapore;
  • Incurred qualifying expenditure during the basis period of the qualifying YA
  • Carry on active business operations in Singapore;
  • Incurred qualifying expenditure during the basis period of the qualifying YA;
  • Meet the 3 full-time local employee condition;
  • File the Income Tax Return for the respective YA before the statutory filing due date 

In the case where a body of persons (“BOP”) is deemed to carry on a business under section 11 of the Income Tax Act 1947, the BOP is eligible for EIS enhanced deductions/ allowances if it meets the qualifying conditions stated in the table above. However, it will not be eligible for EIS cash payout.

Option to Convert Qualifying Expenditure into a Cash Payout

The option to convert qualifying expenditure into a cash payout is to help small, growing businesses defray the costs of their innovation activities.

In lieu of tax deductions and/ or allowances, eligible businesses may opt to convert up to $100,000 of the total qualifying expenditure across all the qualifying activities for each YA into cash at a conversion rate of 20%. The cash payout is capped at $20,000 per YA and is not taxable.

The $100,000 cap on total qualifying expenditure shall apply, in the case of eligible companies, sole-proprietorships and registered business trusts, at the company/ individual/ trust level; and in the case of eligible partnerships, at the partnership level.

Partial cash conversion is allowed for qualifying R&D undertaken in Singapore, licensing of IPRs, training and innovation projects carried out with polytechnics, the ITE or other qualified partners. Partial cash conversion is not allowed for registration of IPs and acquisition of IPRs.

For registration of IPs and acquisition of IPRs, the option to convert qualifying expenditure into a cash payout will be on a per IP registration or per IPR basis:

  • Businesses must convert the full IP registration cost to cash payout, subject to the cap.
  • Qualifying companies or partnerships must convert the full amount of qualifying IPR acquisition costs incurred on a qualifying IPR into cash, subject to the cap.
  • Any IP registration/ acquisition of IPR costs incurred in excess of the cap will be forfeited and will not be available for deduction against the income of the business.

Once an amount of qualifying expenditure is converted into cash, the same amount is no longer available for tax deductions and/ or allowances. The option to convert the qualifying expenditure into cash is irrevocable once exercised.

The option to convert qualifying expenditure into a cash payout is available on an annual basis. An eligible business which wishes to convert its qualifying expenditure into cash will be required to make the irrevocable election by submitting its application via the Apply for EIS Cash Payout digital service after it has filed its Income Tax Return and before the income tax filing due date for the relevant YA.

Details on the Qualifying Conditions for the EIS Cash Payout

Carrying on Active Business Operations in Singapore

To receive the EIS Cash Payout, the eligible business must be carrying on a trade or business. The business must be active at the time of disbursement of cash payout and must not be considered to have ceased business operation. A business entity is considered to have ceased business operation if its status in the Accounting and Corporate Regulatory Authority's (ACRA) register is:

  • Amalgamated
  • In liquidation
  • Struck off
  • Ceased registration
  • Dissolved

Businesses not eligible for the EIS Cash Payouts are:

  • Company under judicial management^
  • Company in receivership^
  • Investment holding company
  • Clubs and associations
  • Charities
  • Variable Capital Company

^Unless the company can prove that it continues to carry on its trade or business during the basis period of the YA and have not ceased operation at the point of cash payout disbursement.

Incurring Qualifying Expenditure

The EIS cash payout is only available when the qualifying expenditure is incurred by the business. An expense is incurred when the legal liability to pay arises, regardless of the date of actual payment of money. 

To apply for the EIS cash payout, a minimum qualifying expenditure of $400 must be incurred during the basis period of the qualifying YA.

Meeting the 3 Full-Time Local Employee Condition

A business meets the 3 full-time local employee condition if it makes Central Provident Fund (CPF) contributions for at least 3 local employees for at least 6 months during the basis period of the qualifying YA. 

For the purpose of the EIS Cash Payout, a full-time employee refers to a Singapore Citizen or Permanent Resident who earns a gross monthly salary of at least $1,400 and is required under a contract of service with an employer to work for at least 35 hours a week, but excludes sole-proprietors, partners of the partnership and shareholders who are directors of the company. For the purpose of determining whether this condition is met, an employee will not be considered a full-time local employee of more than two employers during the same period. 

A full-time employee may include an individual who is deployed to a business under a centralised hiring arrangement or secondment arrangement, subject to the following conditions:

  • The claimant is able to produce supporting documents on the recharging of employment costs by a related entity, in respect of employees working solely in the claimant entity. 
  • The corporate structure and centralised hiring practices are adopted for bona fide commercial reasons.
  • The employee whose cost has been recharged does not contribute to the requisite headcount of the related party (which had borne the upfront manpower costs).

Some examples of centralised hiring arrangements include:

  • Deployments where the Human Resources function of a group of companies is centralised in a single entity, with the staff costs (including training expenditure) allocated to the respective entities.
  • Secondments, where employees are seconded to work for a related company. Once seconded, the staff costs are fully recharged to the related company.

How & When to Claim the EIS Benefits

Claiming Enhanced Tax Deductions/ Allowances

Businesses claiming enhanced tax deductions/ allowances in their Income Tax Returns have to make the claim by the filing due dates for the relevant YA. The filing due dates are:

  • 18 Apr for Sole Proprietorships and Partnerships 
  • 30 Nov for Companies
The qualifying expenditure for the EIS benefits is the amount incurred less any grant/ subsidy received from the Government/ Statutory Board. For a GST-registered business, the qualifying costs incurred for the purpose of claiming the EIS benefits should exclude any GST that is claimable as input tax. However, for a non-GST registered business, the GST component can be included as part of the qualifying costs.

How to Claim Enhanced Tax Deductions/ Allowances
Sole-Proprietorships/ PartnershipsCompanies
  1. Include the enhanced tax deductions/ allowances as part of ‘Allowable Business Expenses’ in the 2-Line/ 4-Line statement in the Income Tax Return.
  2. Submit details of the enhanced tax deductions/ allowances claimed in the Income Tax Return via the Submit EIS Enhanced Deduction/ Allowance Records digital service.
  1. Declare the enhanced deductions/ allowances in the Corporate Income Tax Return.
  2. Details of the enhanced deductions/ allowances should be completed under the 'Enterprise Innovation Scheme' section of the Corporate Income Tax Return.

Applying for the EIS Cash Payout

Businesses applying for the EIS cash payout must e-File the application via the Apply for EIS Cash Payout digital service after submitting their Income Tax Returns for the relevant YA, but not later than the filing due date for the relevant YA.

The Apply for EIS Cash Payout digital service will only be made available to businesses that have submitted their Income Tax Returns before the income tax filing due date. 

Sole-proprietors and partners who are filing the Income Tax Returns via paper forms are reminded to submit their Income Tax Returns early as it will take up to 7 working days for the filing status to be updated. As the Apply for EIS Cash Payout digital service will only be made available after the filing status has been updated, sole proprietors/ partners are encouraged to e-File their Income Tax Returns to avoid delays in accessing the Apply for EIS Cash Payout digital service. 

When Can I Apply for the EIS Cash Payout
Types of business entities that meet the qualifying conditionsOpening Date for YA 2025Due Date for YA 2025
Partnerships

1 Feb 2025

18 Apr 2025
Sole-proprietorships 1 Mar 202518 Apr 2025
    Companies

    Follows the official opening of the Form C-S/ Form C-S (Lite)/ Form C filing digital service

      		30 Nov 2025
      How to Apply for the EIS Cash Payout

      Applicants must file their applications via the Apply for EIS Cash Payout digital service in myTax Portal. 

      If you have incurred qualifying costs on:

      You will receive an instant acknowledgement upon successful submission of the EIS cash payout application. You can view the status of your application via the View EIS Cash Payout Application Status digital service.

      The Apply for EIS Cash Payout digital service only accepts 1 application for each YA. A sole proprietor needs to submit only 1 application for all qualifying expenditures incurred for all the businesses. 

      The election to convert qualifying expenditure to a cash payout is irrevocable. All the records (e.g. invoices, instalment agreement and all other relevant documents) relating to the EIS cash payouts must be kept for 7 years. These documents should be retained and submitted upon IRAS’ request. 

      Under Section 37S of the Income Tax Act 1947, any person who gives to the Comptroller any information that is false in any material particular, or omits any material particular from any information or document, shall be guilty of an offence. It is also an offence to claim for enhanced deductions/ allowances if you have elected for cash conversion on the same qualifying expenditure. 

      The approval of an EIS cash payout application does not preclude IRAS from selecting your EIS application for subsequent audit reviews. If you are subsequently audited and IRAS discovers that you did not qualify for the enhanced deductions/ allowances and/ or the cash payout, IRAS will recover any EIS Cash Payout that was incorrectly disbursed to you.

      When will I receive the EIS Cash Payout
      The EIS cash payout application will generally be processed within 3 months after receiving the completed application online and all other supporting documents as may be requested. 

      Once the application is approved, a physical paper notice will be sent to your registered address. You will be able to view the EIS Notices in myTax Portal.

      IRAS will disburse EIS cash payout via: 

      • Direct credit to your company/ business’s GIRO bank account that is linked to pay for Income Tax/ GST, or
      • Payout via PayNow Corporate/ Paynow NRIC/ FIN (for sole proprietors/ individuals).
      If you do not have the above e-payment modes, please sign up with Paynow and you will receive the payout within 6 to 8 weeks after your successful registration.

      How to amend my online EIS application after submission
      If you notice errors in your application, please login to myTax Portal and email us via myTax Mail with the subject line ‘EIS Cash Payout - Amend Filing’.

      If you have claimed enhanced deductions/ allowances on the same qualifying expenditure which you have elected for cash conversion, please inform us to amend/ adjust the enhanced deductions/ allowances claimed as follows:

      • For sole proprietors/ partners, please email us via myTax Mail with the subject line ‘EIS Enhanced Deductions - Amend Filing’.
      • For companies, the amendments to the enhanced deductions/ allowances should be made via Object to Assessment Digital Service.

      Qualifying Activities under the EIS

      1. Qualifying R&D Undertaken in Singapore

       Amount of Tax Deductions and/ or Allowances Granted Before YA 2024Amount of Tax Deductions and/ or Allowances Granted From YA 2024 to YA 2028
      Qualifying R&D undertaken in Singapore
      • 100% tax deduction on R&D expenditure (Section 14C) plus
      • Additional 150% tax deduction on qualifying R&D expenditure (i.e. staff costs and consumables) (Section 14D)
      • 100% tax deduction on R&D expenditure plus
      • Additional 300% tax deduction on the first $400,000 of qualifying R&D expenditure plus
      • Additional 150% tax deduction on the balance of qualifying R&D expenditure in excess of $400,000

      To further incentivise businesses, especially the small and medium enterprises (SMEs) and the large local enterprises (LLEs), to invest in R&D, the tax deduction for qualifying R&D expenditure incurred on qualifying R&D undertaken in Singapore will be further enhanced as follows:

       

      a.   A further 150% tax deduction is granted on the first $400,000 of qualifying R&D expenditure incurred by a person on qualifying R&D undertaken in Singapore in a basis period, in addition to the 100% base deduction under Section 14C and the current additional 150% tax deduction under Section 14D(1). This means that a total of 400% tax deduction is available on the first $400,000 of qualifying R&D expenditure incurred in the basis period.

       

      b.  The current additional 150% tax deduction allowable under Section 14D(1) remains applicable to qualifying R&D expenditure exceeding $400,000 incurred in the basis period.

       

      All other conditions governing the additional tax deduction for qualifying R&D expenditure incurred on qualifying R&D undertaken in Singapore remain the same.

       

      Extend the relaxation of the “related to trade or business” condition

      Currently, R&D claims under Section 14C of the ITA need not be related to the taxpayer’s existing trade or business if the R&D activity is undertaken in Singapore. The relaxation of this “related to trade or business” condition is effective for YA 2009 to YA 2025. 

      To align with the EIS, the effective period to which the relaxation of the “related to trade or business condition” is extended to and including YA 2028.

      Extend the additional tax deduction for qualifying R&D expenditure under Section 14D


      The additional tax deduction of 150% on qualifying R&D expenditure under Section 14D(1) is available up to YA 2025. To align with the EIS, the additional 150% tax deduction for qualifying R&D expenditure on qualifying R&D projects (related or not related to trade) is extended to and including YA 2028.

       

      2. Registration of IPs

        Amount of Tax Deductions and/ or Allowances Granted Before YA 2024 Amount of Tax Deductions and/ or Allowances Granted From YA 2024 to YA 2028
      Registration of IPs
      • 200% tax deduction on the first $100,000 of qualifying IP registration costs (Section 14A) plus
      • 100% tax deduction on the balance of qualifying IP registration costs in excess of $100,000 (Section 14A)
      • 400% tax deduction on the first $400,000 of qualifying IP registration costs plus
      • 100% tax deduction on the balance of qualifying IP registration costs  in excess of $400,000

      To encourage more firms to create and protect their innovations, the tax deduction for qualifying IP registration costs will be enhanced as follows:

      a.  Extend the tax deduction for qualifying IP registration costs till YA 2028; and

       

      b. Enhance the tax deduction to 400% (i.e. 100% tax deduction and additional 300% tax deduction) for up to $400,000 of qualifying IP registration costs incurred by a person for each YA from YA 2024 to YA 2028. The 100% tax deduction will continue to be allowable for qualifying IP registration costs in excess of $400,000 incurred by the person for each YA from YA 2024 to YA 2028.


      Specific condition applicable to the option to convert qualifying IP registration costs into a cash payout

      The option to convert into a cash payout is on a per registration basis, subject to a cap of $100,000 of qualifying expenditure across all the qualifying activities for each YA. A business must convert the total registration costs incurred in relation to a single application for registration of an IP into cash, subject to the cap. The registration costs in excess of the cap are forfeited and will not be available for deduction against the income of the business. 

      Minimum ownership period of IPRs

      In order to qualify for the enhanced tax deduction and option to convert qualifying expenditure into a cash payout, businesses must own the related IPRs registered (or, where applicable, ensure the application for registration or grant of the related IPR is not assigned to another person) for a minimum period of one year (one-year ownership period). Claw-back provisions shall apply if the one-year ownership period requirement is not complied with.

      All other conditions of the existing scheme remain the same.

      If you have disposed off the IPRs, please submit the EIS – Disposal of IPRs Form within 30 days from the disposal date.

      3. Acquisition and Licensing of IPRs

        Amount of Tax Deductions and/ or Allowances Granted Before YA 2024 Amount of Tax Deductions and/ or Allowances Granted From YA 2024 to YA 2028
      Acquisition and licensing of IPRs

        Acquisition of IPRs

        • 100% WDA on qualifying IPR acquisition costs (Section 19B)

        Licensing of IPRs

        • 100% tax deduction on qualifying IPR licensing expenditure (Section 14 or 14C) plus
        • Additional 100% tax deduction on the first $100,000 of qualifying IPR licensing expenditure (Section 14U)
          • 400% allowance and/ or tax deduction on the first $400,000 (combined cap) of qualifying IPR acquisition costs and/ or qualifying IPR licensing expenditure plus
          • 100% WDA on the balance of qualifying IPR acquisition costs in excess of claim for enhanced allowances plus
          • 100% tax deduction on qualifying IPR licensing expenditure in excess of claim for enhanced tax deduction

          Businesses may either acquire or license IPRs to develop new products, services, or processes. 

          To encourage more firms to engage in IP-related activities and use innovations to improve their productivity and outcomes, the WDA under Section 19B and tax deduction under Section 14U will be enhanced as follows:

          a. Acquisition of IPRs under Section 19B: 

          (i) Extend the granting of WDA for qualifying IPR acquisition till YA 2028 (i.e. WDA is allowed for capital expenditure incurred in respect of qualifying IPRs acquired on or before the last day of the basis period for YA 2028);

           

          (ii) Enhance the WDA to 400% (i.e. 100% WDA and additional 300% WDA) for up to $400,000 of capital expenditure incurred by a company or partnership to acquire qualifying IPRs in each basis period from YA 2024 to YA 2028. Capital expenditure incurred in excess of $400,000 will continue to enjoy the 100% base WDA.


          b. Licensing of IPRs under Section 14U: 

          (i) Extend the tax deduction for qualifying IPR licensing expenditure till YA 2028;

           

          (ii) Enhance the tax deduction to 300% for up to $400,000 of qualifying IPR licensing expenditure incurred by a person for each YA from YA 2024 to YA 2028. Together with the 100% base deduction allowed under Section 14 or Section 14C (as the case may be), a total of 400% tax deduction is available on the first $400,000 of qualifying IPR licensing expenditure.

           

          The amount of qualifying IPR acquisition costs and qualifying IPR licensing expenditure eligible for the new enhanced WDA and enhanced tax deduction is subject to a combined cap of $400,000 for each relevant YA, and is computed based on the amount of qualifying expenditure incurred by the business net of any Government grant or subsidy received by the business in respect of the acquisition and licensing of IPRs.

          The new enhanced WDA and enhanced tax deduction is only available to businesses with annual revenue2 of less than $500 million in the basis period of the YA of claim.

          2 Revenue refers to income that arises from the ordinary activities of a business. It refers to the business' main source of income, excluding separate source income such as interest. The revenue criterion will be applied at the group level if the entity is part of a group.

          Specific condition applicable to the option to convert qualifying expenditure incurred on acquisition of IPRs into a cash payout

          a. For acquisition of IPRs, the option to convert into a cash payout is on a per IPR basis, subject to a cap of $100,000 of qualifying expenditure across all the qualifying activities for each YA. Where the capital expenditure incurred on a qualifying IPR is in excess of the cap of $100,000, the excess is forfeited upon conversion and will not be available for deduction as WDA against the income of the company or partnership concerned.

           

          b. For licensing of IPRs, the option to convert into a cash payout need not be made on a per IPR basis.

           

          Minimum ownership period of IPRs

          a. For acquisition of IPRs, in order to qualify for the enhanced WDA and option to convert qualifying expenditure into a cash payout, companies and partnerships must own the relevant qualifying IPRs for a minimum period of one year (one-year ownership period). Claw-back provisions shall apply if the one-year ownership period requirement is not complied with.

           

          b. The one-year ownership period requirement is not applicable to licensing of IPRs.

           

          All other conditions under Section 19B and Section 14U remain the same.

          If you have disposed off the IPRs, please submit the EIS – Disposal of IPRs Form within 30 days from the disposal date. 

          4. Training

            Amount of Tax Deductions and/ or Allowances Granted Before YA 2024 Amount of Tax Deductions and/ or Allowances Granted From YA 2024 to YA 2028
          Training

            100% tax deduction on training expenditure (Sections 14 and 15)
                • 400% tax deduction on the first $400,000 of qualifying training expenditure plus
                • 100% tax deduction on the balance of qualifying training expenditure in excess of $400,000 and all other training expenditure

                To further reinforce existing measures to encourage employers to invest in enterprise training and capabilities of their employees, an additional 300% tax deduction is granted on the first $400,000 of qualifying training expenditure incurred in a basis period.

                Together with the 100% base deduction under Section 14 of the ITA, a total of 400% tax deduction is granted on the first $400,000 of qualifying training expenditure incurred for each YA. All other training expenditure, including qualifying training expenditure exceeding $400,000, incurred during the basis period continues to enjoy 100% base deduction, subject to the general tax deduction rules under Sections 14 and 15.

                The enhanced tax deduction is applicable to qualifying training expenditure incurred on courses that are eligible for SkillsFuture Singapore (SSG) funding and aligned with the Skills Framework.

                For the purpose of the EIS, qualifying training expenditure refers to course fees paid by employers (whether directly or in the form of reimbursement) to a SSG-funded course provider, including certification fees and assessment fees. The enhanced tax deduction is computed based on the amount of qualifying training expenditure incurred by a business net of any Government grant or subsidy received by the business in respect of the course.

                The training course fee is considered incurred by the business when the training provider issues an invoice to the business for EIS eligible courses attended by its employees or to be attended by its employees at a future date. The list of eligible courses is available on go.gov.sg/eis-training.

                For expired EIS eligible courses, EIS benefits may still be claimed on the qualifying training costs if they are incurred during the basis periods for YA 2024 to YA 2028, and before the course expiry date (i.e., Support End Date). The list of expired EIS eligible courses is available on https://go.gov.sg/expired-eis-courses. 

                No EIS benefits will be granted on qualifying training expenditure reimbursed by an employer to an employee if the amount reimbursed relates to that part of the qualifying training expenditure paid by the employee using his individual SkillsFuture Credit.

                5. Innovation Projects Carried Out with Polytechnics, the ITE or other Qualified Partners

                  Amount of Tax Deductions and/ or Allowances Granted Before YA 2024
                		 Amount of Tax Deductions and/ or Allowances Granted From YA 2024 to YA 2028
                Innovation projects carried out with polytechnics, the ITE or other qualified partners
                  • Not tax deductible if expenditure is capital in nature (Section 15) and does not meet definition of R&D under Section 2 of the ITA
                      • 400% tax deduction on the first $50,000 of qualifying innovation expenditure (Section 14EA)

                      To encourage businesses to kickstart their innovation journey by tapping on existing technical and innovation capabilities within the polytechnics, the ITE or other qualified partners (collectively known as partner institutions3), a 400% tax deduction will be granted on up to $50,000 of qualifying innovation expenditure  incurred by businesses for each YA on qualifying innovation projects carried out with the partner institutions. These expenses are currently not allowable as a deduction under Section 14 or Section 14C of the ITA, on the basis that they are capital in nature and does not meet the definition of R&D under Section 2 of the ITA.

                      To qualify for the tax deduction, the business must be the beneficiary of the qualifying innovation project. The deduction is computed based on the amount of qualifying innovation expenditure incurred by the business net of any Government grant or subsidy received by the business in respect of the qualifying innovation project.

                      For the purpose of the EIS, qualifying innovation projects refer to projects that predominantly involve one or more of the following innovation activities defined within the Oslo Manual 20184:

                       

                      (a) Research and experimental development activities;

                      (b) Engineering, design and other creative work activities;

                      (c) IP-related activities; and

                      (d) Software development and database activities.

                       

                      This scheme will be administered by the partner institutions. The partner institutions will validate the project as a qualifying innovation project and issue the innovation project invoice. Expenditure incurred outside of the collaboration with the partner institutions will not qualify for this tax deduction. 

                      Learn more about the qualifying innovation projects.

                      3 The current list of partner institutions is Singapore Polytechnic, Ngee Ann Polytechnic, Nanyang Polytechnic, Republic Polytechnic, Temasek Polytechnic, the Institute of Technical Education and Precision Engineering Centre of Innovation at A*STAR SIMTech.

                      4 A copy of the Oslo Manual 2018 can be found at https://www.oecd.org/science/oslo-manual-2018-9789264304604-en.htm.

                      FAQ

                      A. Overview of EIS

                      1. Can a new start-up company enjoy both EIS benefits and tax exemption scheme for new start-up company?

                      Yes, if your company meets the conditions under EIS and tax exemption scheme for new start-up company respectively.

                      2. Do I need to exclude grant or subsidies from the EIS claim amount?

                      The EIS claim amount should be net of any grant or subsidies.

                       

                      3. Is there exclusion on the types of industry that will qualify for EIS?

                      No, all eligible person can claim qualifying EIS expenditure incurred for the purpose of their trade or business.

                      4. Does an Association qualify for EIS?

                      An association is defined as a Body of Persons (BOP). A BOP is eligible to claim EIS EDA if it is carrying a trade or business and has incurred qualifying EIS expenditure for the purpose of that trade or business. However, a BOP is not eligible for EIS cash payout as the definition of "eligible person" for purpose of EIS cash payout only includes a company, firm or partner of a partnership.

                       

                      5. Does S10E company qualify for EIS?

                      Yes, company in the business of making investments, subject to the provisions of S10E will qualify for EIS.

                       

                      6. Does investment holding company qualify for EIS?

                      Investment holding company does not qualify for EIS as they do not carry on a trade or business for tax purposes. This company owns investments such as properties and shares for long-term investment and derive investment income such as dividend, interest or rental.

                       

                      7. Does service company qualify for EIS?

                      A service company renders services to/ on behalf of its related companies. Service company that derived arm's length fees and is assessed under the normal tax rules will qualify for EIS. If a service company elects to use the cost-plus mark-up basis of assessment, it will not qualify for EIS.

                       

                      8. Can tax agents or taxpayers update their email addresses for receipt of EIS correspondences via myTax Portal?

                      Currently, there is no option to do so. The correspondences relating to EIS cash payout application are sent via physical mode with a copy deposited in myTax Portal, which is viewable by authorised personnel.

                       

                      9. Can we elect for EIS cash payout and claim EDA on the same qualifying expenditure under the EIS scheme?

                      No, the same qualifying expenditure amount will not be available for tax deduction/allowance once cash payout option is elected.

                       

                      B. EIS Enhanced Deduction/ Allowance (EDA) 


                      1. My company has incurred $1 million for R&D. Do I enter $1 million for EIS enhanced deduction in Form C/C-S/C-S Lite?

                      The qualifying expenditure for EIS enhanced deduction is capped at $400,000 for R&D. You are required to enter $400,000 for EIS enhanced deductions even though you have incurred $1 million.

                       

                      2. A trading company incurred qualifying EIS expenditure during the basis period of YA 2024 but commence its trade or earn its first dollar in YA 2025. Is the company allowed to claim EIS cash payout or EDA on the prior year expenditure in YA 2025?

                      The company is allowed to claim EIS benefits on its qualifying EIS expenditure incurred during basis period of YA 2024 in YA 2025 when it is deemed to have commenced business.

                       

                      C. EIS Cash Payout


                      1. Is base deduction under S14 claimable if the company wants to claim EIS cash payout?

                      An expenditure that is the subject of an EIS cash payout is no longer eligible for base deduction under S14 of the ITA.

                       

                      Example: Company incurred net qualifying expenditure of $2,000 on EIS approved training. If the company elects for cash payout on the net qualifying expenditure of $2,000, this same amount must not be claimed as a base deduction in the company’s tax computation.

                       

                      2. Can a business/ company apply for EIS cash payout if it has received other government grant on the EIS qualifying expenditure?

                      A business/ company can apply for EIS cash payout on the net qualifying expenditure after deducting the grant received.

                       

                      Example: EIS eligible training cost was $20,000, the company received SkillsFuture Singapore (SSG) funding of $15,000 and Skills Future Enterprise Credit (SFEC) of $3,000 from Enterprise Singapore. The company can only claim the net qualifying expenditure after deducting the government grants as follows:

                       

                      EIS eligible training cost$ 20,000
                      Less: SSG Funding$ 15,000
                      Less: SFEC received$ 3,000
                      Net qualifying expenditure allowed to claim for EIS cash payout$ 2,000

                       

                      3. A trading company incurred qualifying EIS expenditure during the basis period of YA 2024 but commence its trade or earn its first dollar in YA 2025. Is the company allowed to claim EIS cash payout or EDA on the prior year expenditure in YA 2025?

                      The company is allowed to claim EIS benefits in YA 2025 whereby it is deemed to have commenced business.

                      4. Is there a minimum qualifying expenditure to submit EIS cash payout application?

                      The minimum expenditure for the cash payout application is $400 per Year of Assessment.

                      5. Can a business/ company apply for EIS cash payout after the due date?

                      A business/ company must submit their EIS cash payout application before the official deadlines, which align with the income tax return filing due dates:

                       

                      • 18 Apr for Sole proprietorships and Partnerships
                      • 30 Nov for Corporates

                      6. Can I request IRAS to disburse the EIS cash payout to a third party?

                      No, the cash payout can only be paid to the eligible person which incurred the qualifying expenditure.

                      D. Training


                      1. Can I claim EIS cash payout on training cost incurred for an employee who was absent for the EIS eligible course or did not complete the full duration of course?

                      Yes, you may do so as the company/ business has incurred the cost on the EIS eligible course for its employees.

                      2. Should absentee payroll funding be deducted from the company’s EIS claim on qualifying training expenses?

                      Absentee payroll funding is not a grant or subsidy to subsidise training expenditure hence the amount received need not be deducted from the company’s EIS claim.

                      3. Are there any documents that I need to provide to IRAS to claim EIS benefits on the training expenses incurred for employees hired under centralised hiring arrangements?

                      You do not need to provide additional documents to IRAS when submitting the claim.

                       

                      However, your claims should be restricted to training fees which are separately identifiable from the charges that are billed to related parties within a group of companies. You should maintain documents on the recharging of employment costs – including itemised invoices and the training costs recharged. These documents would have to be provided to IRAS when requested.

                      4. Am I entitled to claim EIS on the training cost incurred by myself as a Sole Proprietor?

                      No, this is considered a private expense. You can consider claiming course fee relief instead.

                      5. Why can't I find training course from the list of EIS eligible courses website?

                      You can refer to the list of expired EIS eligible courses from this hyperlink at https://go.gov.sg/expired-eis-courses. If you can't locate the course from the listing, please contact [email protected].

                      6. Can I still submit an EIS training claim for expired EIS eligible course?

                      You can still submit an EIS claim on the training cost for expired EIS eligible course if you have indeed incurred the expense during the support funding period for the basis periods of Years of Assessment 2024 to 2028. Please refer to the list of expired EIS eligible courses from this hyperlink at https://go.gov.sg/expired-eis-courses. If you can't locate the course from the listing, please contact [email protected].

                      E. Registration of IP


                      1. Can EIS claim be made on registration cost of trademark with pending application status?

                      You can only submit an EIS claim on Registration of IP when the registration has been completed i.e., Approved or Rejected status.

                      F. Acquisition and Licensing of IPRs


                      1. Does the acquisition of IPRs for existing products of the business qualify for EIS?

                      The acquisition of IPRs for existing products used in a trade or business qualifies for EIS deductions if the legal and economic ownership of the IPRs belong to the business in Singapore.

                      2. What are legal and economic ownership? Will I qualify for EIS if I do not own the trademark and licence but granted with exclusive rights?

                      Legal ownership means that the legal assignment of the IPR is granted to the owner. Economic ownership means the future economic benefits attributable to the IPR will accrue to the beneficiary.  For purpose of EIS, the claimant must have both legal and economic ownership for the subject. Therefore, purely having an economic ownership will not satisfy the requirement for EIS.

                      G. Employee Conditions


                      1. If a sole-proprietorship business is carried on and owned by a company (i.e. not directly by an individual) and the qualifying expenditure was incurred by the sole-proprietorship, which entity should fulfil the 3-local-employee condition to qualify for EIS cash payout?

                      The sole-proprietorship business has to fulfil the 3-local-employee condition in order to qualify for EIS cash payout. This is because the sole-proprietorship has incurred the EIS qualifying expenditure.

                      2. Am I considered as an employee of the business if I am self-employed and have contributed to Medisave account?

                      No, you are self-employed and owner of the business. Thus, you cannot be considered as an employee of the business for the purpose of EIS scheme. The eligibility of a business to claim EIS cash payout is based on the number of employees who are not business owners.

                      3. Will I be eligible to apply for EIS cash payout if I have both part time and full-time employees?

                      Part-time employees do not count towards headcount for claiming EIS cash payout. Only full-time employees who are Singapore Citizens or Permanent Residents, earning a gross monthly salary of at least $1,400, and required under a contract of service to work for at least 35 hours a week, are considered eligible. As a general rule, an employee will not be considered a full-time local employee of more than two employers during the same period. Sole proprietors, partners of partnerships, and shareholders who are directors of the company are not considered as employees of the business.

                      4. If my business does not meet the 3-local-employee condition during the relevant financial period for YA 2024, can we submit YA 2024 expenditure in YA 2025?

                      No, EIS cash payout is given on the qualifying expenditure incurred during basis period of the YA and your business must fulfil the 3-local-employee condition for at least 6 months during the basis period of the qualifying YA.

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