Singapore EDG + Innovation Tax Allowance

Singapore EDG + Innovation Tax Allowance

Offers Singapore companies relief for innovation through the Economic Development Board pathways for technology and digital projects.

Singapore's Enterprise Innovation Scheme (EIS), administered jointly by IRAS and Enterprise Singapore (EnterpriseSG), provides enhanced tax deductions and an optional cash payout to encourage businesses to invest in R&D, intellectual property, and workforce training. Announced in Budget 2023 and available for Years of Assessment 2024 to 2028, the EIS offers 400% tax deductions or allowances on up to SGD 400,000 of qualifying expenditure per year across four categories: R&D conducted in Singapore, IP registration, acquisition and licensing of intellectual property rights, and SkillsFuture-aligned training courses. Budget 2026 added qualifying AI expenditures as a fifth category.

Businesses that cannot fully absorb the enhanced deductions may convert up to SGD 100,000 of total qualifying expenditure per Year of Assessment into a cash payout at a 20% conversion rate, yielding a maximum cash benefit of approximately SGD 20,000 per year (AI expenditures excluded from the cash option). Additionally, companies conducting qualifying innovation projects in partnership with polytechnics, ITE, or other approved institutions receive 400% deductions on up to SGD 50,000 per year for those collaboration costs. The Enterprise Development Grant (EDG), delivered separately by EnterpriseSG, provides direct funding support of up to 50% of eligible project costs (up to 70% for sustainability-related projects) to Singapore-registered companies with at least 30% local equity.

Eligibility for the EIS requires a business entity registered and operating in Singapore that is subject to Singapore income tax; for EDG, at least 30% local equity and financial readiness to complete the project are required. Applications for EDG go through the Business Grants Portal using CorpPass, with a processing time of approximately 8–12 weeks. Structured record data reflects award values ranging from SGD 30,000 to SGD 2 million. Both programs are sector-agnostic, with no competitive selection under EIS and a project-proposal review process under EDG.