This track is for founders and early finance hires of a Singapore company that is loss-making or pre-revenue and is deciding whether, when and how to claim the R&D tax deductions, including those under the Enterprise Innovation Scheme (EIS). The benefit is an enhanced tax deduction: 400% 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, and 250% above that. The one cash element is the optional EIS cash payout of 20% of up to S$100,000 of qualifying expenditure, so up to S$20,000 per Year of Assessment, with an employee condition a very small team may not meet. There is no registration; the claim is made in the corporate income tax return, administered by the Inland Revenue Authority of Singapore (IRAS).
How the Singapore rules change the program
| Module | What is different in Singapore | Country page |
|---|---|---|
| Is it worth claiming | Benefit type: enhanced tax deduction, with an optional cash payout. The Singapore corporate income tax rate is 17 percent, so a S$400,000 deduction is worth S$68,000 of tax to a company with profits to use it. A loss-making company adds the deduction to unabsorbed losses, which may be carried forward indefinitely subject to the shareholding test under section 37. | Cash payout option |
| Setting up from day one | Keep documents that show each project's objective, its novelty or technical risk, the work done and the qualifying expenditure; IRAS can ask for them when it reviews a claim. | IRAS requirements |
| Funding interactions | R&D expenditure that is funded by a government grant or subsidy is not deductible, and the enhanced deductions apply only to the portion of qualifying expenditure borne by the company. Government grants are generally taxable as income unless specifically exempted, and the letter of offer indicates the tax treatment. | Grants and other incentives |
| Your first claim | Claim the enhanced deduction in the corporate income tax return by its filing due date, Form C-S or Form C, with the tax computation showing the section 14C and 14D amounts. Apply for any cash payout using the Apply for EIS Cash Payout service after filing the return and before the filing due date. | How to claim |
Forms and deadlines
| Form or step | Deadline or timing | Country page |
|---|---|---|
| Estimated chargeable income (ECI) | Within 3 months after the financial year end; companies with annual revenue of S$5 million or less and nil ECI are not required to file. | Deadlines |
| Corporate income tax return (Form C-S or Form C) | Filing due date 30 November of the Year of Assessment. The basis period is the financial year ending in the preceding calendar year. | How to claim |
| Apply for EIS Cash Payout service | After filing the income tax return and by the filing due date of the Year of Assessment. Paid after approval of the application. Available for the Years of Assessment 2024 to 2028; does not apply to the AI adoption category added in Budget 2026. | Cash payout option |
Key rules to know
What the tiers apply to. Staff costs comprise salaries, bonuses, allowances and employer CPF contributions of employees directly engaged in the R&D, excluding directors' fees, apportioned where the employee is not wholly engaged. Consumables are materials and items used up or transformed in the course of the R&D, excluding utilities and items of a capital nature. Expenditure on R&D undertaken outside Singapore is deductible at 100 percent where related to the trade and does not qualify for the additional deductions, and only in-Singapore expenditure may be converted into the cash payout.
The employee condition. At least three full-time local employees (Singapore Citizens or Permanent Residents with CPF contributions), each earning a gross monthly salary of at least S$1,400 employed for six months or more in the basis period; they may include shareholder-directors who are employees. IRAS may recover a cash payout and impose penalties where the expenditure converted did not qualify or the employee condition was not met.
The payout is a trade. Expenditure converted into a cash payout is not also deductible, and an approved election is irrevocable. Converting S$100,000 of Singapore staff costs gives S$20,000 now and gives up a S$400,000 deduction, which at 17 percent would save S$68,000 once the company is profitable.
What IRAS tests. Three requirements: the objective is to acquire new knowledge, create new products or processes or improve existing ones; the study involves novelty or technical risk; and it is a systematic, investigative and experimental study in a field of science or technology. Technical risk exists where the probability of achieving the technical objective cannot be known or determined in advance by a competent professional based on current knowledge, and novelty means new in the field rather than new to the business.
Worked example
Illustrative example. Kallang Robotics Pte Ltd, a hypothetical pre-revenue company with a 31 December 2025 financial year end, claims in YA 2026. It has four full-time local employees paid above S$1,400 a month for the whole basis period, all working in Singapore on a project with documented technical risk. An Enterprise Singapore grant, approved before the project started, paid S$50,000 of the R&D salaries.
| Step | Figures | Result |
|---|---|---|
| Setting up from day one | Timesheets support S$300,000 of R&D staff costs (no directors' fees) and S$20,000 of consumables; cloud and software costs S$30,000 | Singapore staff costs and consumables S$320,000; other R&D expenditure S$30,000 |
| Funding interactions | The S$50,000 funded by the grant is not deductible; the enhanced deductions apply only to the portion borne by the company | Qualifying staff costs and consumables S$270,000 |
| Deduct everything | 400% of S$270,000 = S$1,080,000; 100% of S$30,000 = S$30,000 | Deduction S$1,110,000 added to unabsorbed losses; no cash |
| Convert S$100,000 | Payout 20% of S$100,000 = S$20,000, not taxable. Remaining S$170,000 at 400% = S$680,000, plus S$30,000 | S$20,000 cash and a S$710,000 deduction; the S$400,000 given up would have saved S$68,000 at 17 percent once profitable |
| Your first claim | Revenue and ECI nil, so no ECI filing. Form C-S filed in October 2026 with the converted S$100,000 excluded; cash payout applied for after filing and before 30 November 2026 | S$20,000 paid after approval; records kept for 5 years from YA 2026 |
Kallang converts because it does not expect chargeable income for at least three years and is planning a funding round that could affect the shareholding test. Had it been profitable, the deduction would have been the better choice by a wide margin.
Related country guide pages
Self-check questions
Answer each question, then open it to compare.
A pre-revenue Singapore company spends S$200,000 on R&D staff costs in Singapore. What does the enhanced deduction give it this year in cash?
What is the most a company can receive from the EIS cash payout in a Year of Assessment, and what does it give up?
Two founders and one employee work at the company. Can it apply for the cash payout?
The company received a government grant that paid for S$50,000 of its R&D salaries. How does that change the enhanced deduction?
The financial year ended on 31 December 2025. When is the return due, and when must the cash payout application go in?
Official sources
- Enterprise Innovation Scheme (EIS)Inland Revenue Authority of Singapore
- IRAS e-Tax Guide: Enterprise Innovation SchemeInland Revenue Authority of Singapore
- Research and Development (R&D) expenditureInland Revenue Authority of Singapore
- Filing corporate income tax returnsInland Revenue Authority of Singapore
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Educational content only, not tax advice. See the disclaimer.