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In this seventh edition of the R&D Tax Measures e-Tax guide, IRAS is featuring a much sought-after tool for Taxpayers seeking certainty within their R&D claims.

Indeed, until now, claiming yearly R&D expenditures under the generous R&D Tax Measures scheme has always presented a degree of uncertainty for companies. A mischaracterization of a project as an R&D project or the lack of supporting documents justifying certain expenses could have led to a rejection of their claims.

Now, with this new R&D Assurance Framework, taxpayers will be able to request a preliminary review of their R&D project by IRAS in order to secure their eligibility to the scheme for the next three Years of Assessments.

Of course, a couple of conditions apply in order to qualify to this framework:

  • Justify and maintain a good internal evaluation process and supporting documentation;
  • Undertake at least 5 in-house R&D projects in Singapore in the YA of application; and
  • Justify at least $500,000 qualifying R&D expenditures for these projects in the YA of application.

This application to the R&D Assurance Framework will have to be anticipated since it must be made at least 9 months before the claiming due date of the respective YA.

Thus, despite the qualifying conditions imposed by IRAS, the R&D Assurance Framework is clearly a step forward, considering that the previous “Pre-Claim Scheme” was only for projects justifying expenditures above $15 million.

All in all, the R&D Assurance Framework can be a good tool for companies that need a strong assurance on the validity of their claims. However, the application to this framework is not a trivial process and the decision should be made by analyzing the risk-benefit balance of the approach.

Therefore, our experts are at your disposal to review and define your overall public funding strategy by providing personalized solutions to your R&D projects.

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