Budget 2023 measures to support businesses
Last updated on 9 March 2023
During the Budget Statement 2023, DPM Lawrence Wong announced a slew of tax measures to encourage businesses to invest in R&D, innovation and capability development. We bring you some of the highlights below.
Enterprise Innovation Scheme (EIS)
From Year of Assessment (YA) 2024 to 2028, businesses that conduct qualifying R&D projects in Singapore, register their intellectual property (IP), acquire IP or incur training expenditure under the SkillsFuture framework will enjoy enhanced tax deductions. In addition, those that partner with local tertiary institutions for innovation projects will also enjoy similar benefits. The changes to the tax benefits are detailed in the table below.
Instead of tax deductions, eligible businesses can opt for a non-taxable cash payout (capped at $20,000) on up to $100,000 of total qualifying expenditure across all qualifying activities described above.
Accelerate capital allowances and expenditure
To support businesses, IRAS will provide an option to allow companies to accelerate capital allowances claims in YA2024 (ie. Financial year ending in 2023) on plant and machinery over 2 years (instead of 3 years/useful life). Similarly, Renovation and Refurbishment (R&R) expenditure incurred in YA2024 can be deducted over 1 year (instead of 3 years).
Financial Sector Incentive (FSI) Scheme
The financial services sector will get refinements to the FSI scheme. The Monetary Authority of Singapore will release more details in due time.
Extension of other allowance and incentive schemes
To continue to encourage growth and development in the businesses in Singapore, various schemes which were set to lapse in 2023, would be extended up to 2028. The extensions are applicable to schemes which includes:
- Pioneer Certificate Incentive (PC)
- Development and Expansion Incentive (DEI)
- Investment Allowance (IA) Schemes
- IP Development Incentive (IDI)
Changes in the business environment occur from time to time, depending on the policies and direction that the local government adopts. When it feels like a challenge to keep track of these changes, do approach your professional service providers on corporate tax and accounting services in Singapore for further information on these schemes. Your accountants would love to be of assistance to you. Additionally, professional companies that provide HR and payroll services will also be able to advise you on the qualifying staff costs for the schemes above.