The three requirements are the same in every sector: an objective of new knowledge or new or improved products or processes, novelty or technical risk, and systematic study in a field of science or technology. Singapore's economy concentrates R&D in software and fintech, electronics and precision manufacturing, biomedical sciences and, increasingly, food and agritech, and IRAS's guidance and queries reflect that mix. This page walks through the main sectors; the industry guides go deeper.
Where qualifying work sits by sector
| Sector | Usually qualifies | Usually does not | Watch for |
|---|---|---|---|
| Software and fintech | Resolving technical risk in algorithms, architecture, performance, security or data where the answer was not known in the field | Routine development with established techniques, configuration, integration, UI changes | Novelty to the field, not to the company; IRAS's software guidance |
| Electronics and advanced manufacturing | New materials, processes and devices developed through experimentation | Routine modifications, quality control, routine testing | Where the technical risk is resolved; capital items |
| Biomedical sciences | Discovery, preclinical and clinical development, device development | Routine release testing, regulatory documentation | Overseas trials at 100%; grants |
| Food and agritech | Formulation, process and cultivation experiments with technical targets | Cosmetic or stylistic changes, taste-led changes, market research | The cosmetic exclusion |
| Logistics and services | Technology development underpinning the service | Efficiency surveys, management studies, process re-engineering | The efficiency survey exclusion |
Software
Software is the largest category of Singapore claims and the one IRAS queries most. IRAS's position follows the definition: software development qualifies where it involves novelty or technical risk in the field of computer science or software engineering and proceeds as a systematic study, and does not qualify where it applies established techniques to build something commercially new. Routine modifications and changes to processes, listed in the statutory exclusions, cover most feature work, and configuration and integration lack technical risk.
Successful claims identify the specific technical problem that existing knowledge could not solve, such as a latency or throughput target no documented architecture achieved, a model accuracy threshold on the company's data, or a security property under adversarial conditions, and document the alternatives tested. The R&D ends when the technical risk is resolved; the rest of the release is routine. Fintech claims face the same test, with the added caution that regulatory compliance work is not R&D.
Electronics and advanced manufacturing
Singapore's electronics, semiconductor equipment and precision engineering sectors produce classic experimental development: new process windows for new materials, yield improvements where the failure mechanism was unknown, device designs that had to be tested to be proven. The exclusions that matter are routine testing and quality control, which cover production test and inspection, and routine modifications, which cover tooling and process adjustments with known outcomes. Prototypes and pilot runs built to resolve technical risk are R&D; production runs are not. Equipment bought for the R&D is capital expenditure and goes through capital allowances rather than the R&D deduction, which differs from Australia and Ireland.
Biomedical sciences
Pharmaceutical, biotechnology and medical device development meets the three requirements readily, and the Singapore issues are location and funding. Clinical trials and specialist testing run overseas earn the 100% deduction only, where related to the trade, so companies plan which phases to run in Singapore. Government grants for the same work reduce the deductible expenditure. Companies at the discovery stage are often loss-making, so the enhanced deductions create losses to carry forward rather than cash, and the EIS cash payout, capped at S$20,000 a year, is the only cash element; the cash payout page explains it.
Other sectors
Food and agritech. Alternative protein, urban farming and food processing projects qualify where they resolve technical risk through systematic trials: a cultivation parameter that had to be found, a texture or shelf-life target no known formulation reached. Taste-led changes and packaging are cosmetic or stylistic modifications, excluded. Market research is excluded.
Logistics, retail and services. Claims rest on technology development. Process improvement, efficiency surveys and management studies are excluded by the Act even where they use data and software.
Energy and sustainability. Development qualifies in the ordinary way; projects often carry grants that reduce the deductible expenditure.
Multinational R&D centres. Where a Singapore entity performs R&D for an overseas parent, the question is whether it bears the cost and undertakes the R&D for its own trade or merely provides services. Payments under an R&D cost-sharing agreement can qualify for deduction, subject to conditions.
Illustrative example
Illustrative example. Three hypothetical companies. Kallang Payments does not know whether a fraud model can reach a target false positive rate on its transaction data within a 50 millisecond scoring budget; it tests three architectures and records the results. Qualifies; the merchant dashboard is routine development. Tuas Precision develops a machining process for a new ceramic composite, running a designed matrix of trials before surface integrity was consistent. Qualifies; the new fixture bought for production is a capital item. Geylang Foods reformulates a sauce to taste spicier. Excluded, a stylistic change. Its parallel project to keep a plant-based sauce stable at ambient temperature for 9 months without preservatives, with microbial testing at intervals, qualifies.
Related pages
Official sources
Educational content only, not tax advice. See the disclaimer.