Beyond R&D: Capturing and commercialising IP

THE quest for Singapore to be an innovation-driven economy has been relentless since the last decade. This focus was intensified with the announcement of a record S$19 billion five-year Research, Innovation and Enterprise (RIE) 2020 Plan in 2016.

Now, midway into the RIE 2020 Plan, the intention to accelerate the pace of innovation growth is clear: the government has proposed to increase the existing R&D tax deduction from 150 per cent to 250 per cent for staff costs and consumables incurred on qualifying R&D projects performed in Singapore with effect from financial year 2018.

Based on the current corporate tax rate of 17 per cent, the proposed 250 per cent R&D tax deduction equates to an after-tax benefit of 42.5 cents for every qualifying dollar of R&D expenditure. This benefit is globally competitive against more mature jurisdictions such as Australia, the UK and US - and sends a positive signal to large companies on where to place their precious R&D dollars.