The R&D deductions are one layer of Singapore's support for innovation. Government agencies run grants and tax incentives that fund or reward R&D directly, and most Singapore companies doing serious R&D hold at least one. This page names the main programmes and the agency that administers each, explains how grant funding interacts with the deduction, and suggests how to plan the stack. It deliberately gives no grant amounts or rates: those change with each Budget and belong on the agencies' own pages, which are linked in the sources.
What it is
| Programme | Administering agency | Type |
|---|---|---|
| Research Incentive Scheme for Companies (RISC) | Singapore Economic Development Board (EDB) | Grant for R&D projects and capabilities |
| Pioneer Certificate Incentive and Development and Expansion Incentive | EDB | Concessionary corporate tax rates for qualifying activities |
| Intellectual Property Development Incentive | EDB | Concessionary tax rate on qualifying IP income |
| Enterprise Development Grant (EDG) | Enterprise Singapore | Grant for capability, innovation and internationalisation projects |
| Startup SG programmes | Enterprise Singapore | Founder, tech and equity co-investment schemes for start-ups |
| A*STAR industry collaboration programmes | Agency for Science, Technology and Research (A*STAR) | Co-funded research collaboration and technology access |
| Enterprise Innovation Scheme | IRAS | Enhanced tax deductions and cash payout, covered throughout this guide |
Who it applies to
Each programme has its own eligibility, which the agency sets and changes. Broadly, EDB incentives are aimed at larger companies and multinationals making substantial commitments in Singapore; Enterprise Singapore grants at small and medium enterprises and start-ups; A*STAR programmes at companies that want to work with public research institutes. Many companies hold a grant and claim the deduction on the same project, which is where the interaction rule matters.
The interaction rule. R&D expenditure met by a government grant is not deductible to the extent of the grant. A company that receives a grant covering half of a project's staff costs claims the deduction, and the enhanced tiers, on the other half. Grant income is generally taxable unless specifically exempted, and the agency's letter of offer states the tax treatment. Companies with concessionary tax rates under EDB incentives should check how the R&D deductions interact with the incentive income, because a deduction against income taxed at a concessionary rate is worth less.
How it works
- Map the project to the programmes that could fund it, by agency and type, and check each agency's current eligibility and application process.
- Apply for grants before the work starts. Agencies generally fund projects prospectively and do not reimburse costs incurred before approval.
- Track grant-funded costs by project so that the deductible portion can be identified.
- Claim the deduction on the unfunded portion, with the enhanced tiers on the Singapore staff costs and consumables within it.
- Consider the cash payout on the unfunded portion if the company is loss-making.
- Report consistently. The project described to the grant agency and to IRAS should be the same project with the same costs; agencies and IRAS compare notes in audits.
Timing matters. A grant approved after the work started leaves the earlier costs fully deductible; a grant approved first reduces the deductible base from the start. Companies model both before deciding whether to apply.
Agencies also run programmes that are not grants: EDB's incentives are concessionary tax rates granted by agreement, and A*STAR's programmes are collaborations in which the agency's researchers and facilities do part of the work. Each changes the R&D deduction picture differently. A concessionary rate lowers the value of a deduction; a collaboration moves part of the expenditure into payments to a research organisation, of which 60% can earn the enhanced tiers as staff costs and consumables.
Worked example
Illustrative example. Yishun Agritech Pte Ltd, a hypothetical company, develops a sensor-driven irrigation controller. It receives a grant from a government agency covering half of the project's S$400,000 of Singapore staff costs and consumables, and has S$60,000 of other R&D expenditure.
| Item | Amount | Treatment |
|---|---|---|
| Staff costs and consumables funded by the grant | S$200,000 | Not deductible |
| Staff costs and consumables borne by Yishun | S$200,000 | 400% under the EIS: S$800,000 deduction |
| Other R&D expenditure | S$60,000 | 100%: S$60,000 deduction |
| Grant received | S$200,000 | Taxable income unless the letter of offer exempts it |
Yishun's R&D deduction is S$860,000 rather than the S$1,660,000 it would have been without the grant, but it has S$200,000 of cash it would not otherwise have had. The grant is the better deal for a loss-making company; for a profitable company the comparison is closer and depends on the tax rate and the grant's conditions.
Common questions
Can we claim the deduction and a grant on the same project? Yes, on the portion of the expenditure the grant does not fund.
Is the grant taxable? Generally yes, unless the letter of offer says it is exempt.
Where are the grant amounts and rates? On each agency's own pages, linked in the sources. They change with each Budget and are not stated here.
Do EDB incentives affect the R&D deduction? The deduction still applies, but its value depends on the rate at which the income it offsets is taxed.
Related pages
Official sources
Educational content only, not tax advice. See the disclaimer.