Singapore vs Australia: R&D incentives compared

Groups with a Singapore company and an Australian subsidiary, and advisors who serve both markets, compare these two schemes often. Singapore gives an enhanced deduction claimed in the tax return with no registration; Australia gives a tax offset that exists only if the activities were registered in time. This page sets them side by side and computes one set of costs under both.

At a glance

Point	Singapore	Australia
Scheme and administering body	R&D tax deductions, including the Enterprise Innovation Scheme (EIS). Inland Revenue Authority of Singapore (IRAS)	Research and Development Tax Incentive (R&DTI). Department of Industry, Science and Resources, on behalf of Industry Innovation and Science Australia, and the Australian Taxation Office (ATO)
Form of benefit	Enhanced tax deduction, with an optional cash payout	Tax offset
Headline rates	400% deduction on the first S$400,000 of staff costs and consumables for qualifying R&D carried out in Singapore, each Year of Assessment from YA 2024 to YA 2028; 250% above that. R&D undertaken outside Singapore that is related to the trade is deductible at 100%	Refundable offset: corporate tax rate plus an 18.5% premium, for aggregated turnover under A$20 million. Non-refundable offset: corporate tax rate plus 8.5% (R&D intensity up to 2%) or 16.5% (above 2%), for aggregated turnover of A$20 million or more. Offset for R&D expenditure of up to A$150 million a year
Refundability	No refund of the deduction itself. Optional cash payout of 20% of up to S$100,000 of qualifying expenditure across EIS activities, so up to S$20,000 per Year of Assessment, with conditions	Yes, for aggregated turnover under A$20 million
Who can claim	Businesses with qualifying R&D expenditure	Corporations incorporated in Australia, foreign corporations that are Australian residents for tax purposes, and some foreign corporations with a permanent establishment in Australia, spending at least A$20,000 on eligible R&D in the income year unless using a research service provider or contributing to the Cooperative Research Centres Program
Definition of qualifying work	Systematic, investigative and experimental study that involves novelty or technical risk, carried out in the field of science or technology to acquire new knowledge, or to use the results to produce or improve materials, devices, products, produce or processes	Core R&D activities: experimental activities whose outcome cannot be known in advance from current knowledge, following a systematic progression from hypothesis to experiment, observation and evaluation, leading to logical conclusions, to generate new knowledge. Supporting R&D activities: directly related to a core activity, some for the dominant purpose of supporting it
Registration or approval step	None	Register R&D activities with the department within 10 months of the end of the income year, for each income year
Claim deadline	In the corporate income tax return by its filing due date, 30 November of the Year of Assessment. Any cash payout application after filing the return and before the filing due date	After registration, in the company tax return, by completing the R&D tax incentive schedule
Written description required	An R&D claim form for larger claims, giving project descriptions and a breakdown of expenditure; check IRAS guidance for the current threshold. Keep documents that show each project's objective, its novelty or technical risk, the work done and the qualifying expenditure	The registration application describes each core and supporting activity, including the hypothesis, experiment, observations, evaluation and conclusions, and the estimated expenditure
Review body and time limit	IRAS may request further information before finalising the assessment and may seek the views of technical experts. Additional assessments within 4 years after the end of the Year of Assessment, with no time limit in cases of fraud or wilful default	The department may examine registered activities and make eligibility findings binding the Commissioner of Taxation; the ATO reviews expenditure and the offset. Amendment within 2 years (small business entity) or 4 years (others) from the notice of assessment

Australia's 2026-27 Budget (12 May 2026) proposed measures from 1 July 2028 that are not yet legislated, among them a 4.5 percentage point increase in offset rates for core R&D, removal of supporting R&D activities from eligibility, a refundable offset turnover threshold of A$50 million and minimum notional deductions of A$50,000. The current rules apply until then.

Where the schemes differ in practice

A deduction against an offset, and why profit matters

Singapore's benefit is a deduction, so its value depends on the tax it saves at the 17% corporate income tax rate. Where there are no profits to absorb it, unabsorbed losses may be carried forward indefinitely subject to the shareholding test under section 37 (enhanced deductions). Australia's offset is a percentage of notional deductions, and notionally deducted expenditure cannot also be deducted, so the offset replaces the ordinary deduction (refundable versus non-refundable).

Cash for a company that is not paying tax

The EIS cash payout needs at least three full-time local employees, each earning a gross monthly salary of at least S$1,400 and employed for six months or more in the basis period. Expenditure converted into a payout is not also deductible, an approved election is irrevocable, only expenditure on R&D carried out in Singapore may be converted, and the payout is not taxable income (cash payout option). The Australian refundable offset has no equivalent S$20,000 ceiling. Aggregated turnover for the A$20 million test includes connected entities and affiliates, including foreign entities (refundable versus non-refundable).

No registration against annual registration

Singapore requires no registration: the deduction is claimed in the corporate income tax return by 30 November of the Year of Assessment (how to claim in Singapore, Singapore deadlines). An Australian R&D entity must register for each income year in which it wishes to claim, within 10 months of the end of the income year; late applications without an extension are refused (registration with AusIndustry).

Which costs earn the full benefit, and where the work is done

In Singapore only staff costs and consumables for R&D carried out in Singapore earn the 400% and 250% tiers. Other R&D expenditure, including overheads, utilities and software, gets the base 100% deduction only. Location is where the activities are physically performed, and for R&D outsourced to an R&D organisation in Singapore IRAS treats 60% of the fee as qualifying staff costs and consumables (Singapore qualifying expenditure, R&D in Singapore versus overseas). An Australian R&D entity can notionally deduct expenditure on registered activities, including overheads such as rent, electricity and administration apportioned by a reasonable method. Work outside Australia needs an Overseas Finding (Australian eligible expenditure, advance and overseas findings).

How each claim is reviewed

IRAS selects companies for audit on a risk basis and may ask for project descriptions, the basis for concluding that the three requirements are met and the expenditure breakdown. An objection must be lodged within 2 months of the notice of assessment, with appeal to the Income Tax Board of Review (IRAS requirements, IRAS reviews). In Australia the department and the ATO run a joint compliance program and share registration and claim data. A finding may go to internal review within 28 days, then the Administrative Review Tribunal (ATO and DISE reviews).

Illustrative example

Illustrative example. Ellery Robotics, a hypothetical company, spends 500,000 in a year on one qualifying project: 450,000 in staff costs of engineers directly engaged in the work, all of their time, and 50,000 in consumables used up in testing. The same figures are used in both currencies, and all work is carried out in the home country.

Step	Singapore	Australia
Assumptions	The Year of Assessment falls within YA 2024 to YA 2028; the company has chargeable income at least equal to the deduction; the cash payout is not taken	Aggregated turnover under A$20 million; a base rate entity paying company tax at 25%; activities registered within 10 months of the end of the income year; the A$20,000 minimum is met
Arithmetic	400% of the first S$400,000 = S$1,600,000. 250% of the remaining S$100,000 = S$250,000. Total deduction S$1,850,000. At the 17% corporate income tax rate the deduction is worth S$314,500 of tax	Notional deductions A$500,000. Refundable offset rate 25% plus 18.5% = 43.5%. 43.5% of A$500,000 = A$217,500
Benefit above an ordinary deduction	A plain 100% deduction of S$500,000 would be worth S$85,000 at 17%, so the enhancement adds S$229,500	A$125,000 of the offset (25% of A$500,000) stands in for the deduction the expenditure would otherwise have earned, so the net benefit is A$92,500, the 18.5% premium
If no tax were payable	The deduction creates or adds to an unabsorbed loss, carried forward subject to the shareholding test. Alternatively, if the employee condition is met, S$100,000 could be converted into a S$20,000 cash payout, forgoing the deduction on that S$100,000	The whole A$217,500 is refunded, because the offset is refundable for aggregated turnover under A$20 million

Which to study first

Put the Australian registration date in the calendar first: without registration there is no offset, whereas the Singapore claim travels with the return. The definitions are close in substance, so study the one under which the larger claim falls and read the other's exclusions. For the money, read the Singapore enhanced deductions and Singapore versus overseas pages together, then the Australian refundable and non-refundable page.

Educational material, not advice. Eligibility and treatment depend on the scheme and the facts.

Singapore vs Australia