Enterprise Innovation Scheme

The landscape of business innovation and development in Singapore has witnessed a significant leap with the introduction of the Enterprise Innovation Scheme (EIS). This initiative, initiated by the government, is designed to provide substantial support and encouragement to Singapore companies engaged in Research and Development (R&D), innovation, and capability development activities. Geared towards fostering a culture of innovation and productivity, the EIS aims to bolster the competitive edge of businesses, driving growth and advancement across diverse sectors. With its enhanced tax deductions and a cash conversion option, the EIS stands as a beacon for enterprises seeking to revolutionize their operations and embrace cutting-edge advancements.

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Topics To Be Discussed

Key Facts about the EIS Incentive

Benefits of the EIS Incentive

Eligibility Criteria for the EIS

How to Apply for the EIS

Key Facts about the Enterprise Innovation Scheme

The Enterprise Innovation Scheme is a pioneering program introduced by the Inland Revenue Authority of Singapore (IRAS), set to be in effect from the Year of Assessment (YA) 2024 to YA 2028. It offers businesses an enhanced tax deduction of up to 400% for five distinct categories of qualifying activities. The EIS encompasses a diverse array of activities, including research and development, intellectual property registration, acquisition and licensing of IP rights, qualifying training expenditure, and collaborative innovation projects with local institutions. By providing substantial tax benefits and incentives, the EIS aims to stimulate a culture of innovation and foster a dynamic business ecosystem primed for growth and success.

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Tax credit Amount

Up to 400% tax deduction

Timeline

The evaluation period can vary but typically takes several weeks to a few months.

Key Requirements

1. Company registered in Singapore;

2. Company must carry out innovation activities.

Benefits of Singapore Enterprise Innovation Scheme

The Enterprise Innovation Scheme offers a range of significant benefits to eligible businesses, providing a robust framework for fostering innovation and growth.

Enhanced Tax Deduction. Under the EIS, eligible companies can claim up to 400% tax deduction for five categories of qualifying activities. It enables businesses to allocate resources towards pioneering initiatives and technological advancements, fostering a culture of innovation and excellence within their operations.
Cash Conversion Option. In addition to the enhanced tax deductions, eligible businesses have the option to convert up to S$100,000 of the total qualifying expenditure for each Year of Assessment into cash at a conversion rate of 20%. This cash conversion option provides companies with the flexibility to manage their financial resources effectively, facilitating the seamless integration of innovative practices and initiatives within their operations.

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Eligibility Criteria for the Enterprise Innovation Scheme

To qualify for the Enterprise Innovation Scheme, companies must meet specific eligibility criteria outlined by the government.

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Singapore-based company: An applicant should be a company incorporated in Singapore and tax resident in the country.

Eligible projects: A company should implement any of the following projects:

R&D Activities. Businesses engaged in R&D projects can avail of tax benefits if their initiatives meet specific criteria. These include the acquisition of new knowledge, the creation of new products or processes, or the enhancement of existing products or processes. The EIS provides a robust framework for businesses to undertake pioneering R&D activities, facilitating the exploration of groundbreaking ideas and concepts that contribute to their long-term growth and competitiveness.

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How to Apply for the EIS

Implementing the Enterprise Innovation Scheme involves a systematic approach to ensure seamless and efficient processing. The following steps outline the application process for companies interested in leveraging the benefits of the EIS:

Prepare and submit the Research and Development Claim Form (in case of R&D projects for example) along with your company's Corporate Income Tax Return for the relevant Year of Assessment. Companies filing Form C should file the completed R&D Claim Form together with their Form C. Meanwhile, companies filing Form C-S/ Form C-S (Lite) must retain the completed R&D Claim Form and submit it to IRAS upon request.

It is imperative to maintain thorough documentation of all your business activities, especially those related to R&D or other relevant projects. Keep detailed records of the objectives, novelty, technical risks, and systematic, investigative, and experimental (SIE) studies. Ensure that your documentation reflects the progression and outcomes of your innovation initiatives and can be readily presented to IRAS upon request.

By adhering to these comprehensive steps, businesses can navigate the application process smoothly and maximize the benefits provided by the Enterprise Innovation Scheme.

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Our team of Incentives consultants is dedicated to assisting you throughout the incentives application process, ensuring that your submission effectively showcases the essential aspects of your project and increases your chances of receiving an award. By collaborating closely with our consultants, you will provide them with the necessary information, and together, we will prepare and submit your application. Discover more about our comprehensive Incentives services and how they can benefit your business.

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This series of articles regarding Singapore government incentives was prepared by CorporateServices.com, a leading Singapore-based corporate service provider. We offer a range of services for private limited companies in Singapore. Our team of experienced experts provides Singapore company registration and other incorporation-related services through our cutting-edge online platform.

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