As announced in Budget 2023, Enterprise Innovation Scheme (“EIS”) is introduced to encourage businesses to engage in research and development (“R&D”), innovation and capability development activities.
Under the EIS, existing tax measures will be enhanced and a new tax measure will be introduced. In addition, eligible businesses may opt to convert up to $100,000 of the total qualifying expenditure for each Year of Assessment (“YA”) into cash at a conversion rate of 20%.
Enhanced Tax Deduction for Qualifying Training Expenditure
Today, businesses can claim a 100% tax deduction on training expenditure as a deductible business expense, subject to the general tax deduction rules under sections 14 and 15 of the ITA.
Announced in Budget 2023, the enhancement will allow businesses to enjoy a tax deduction of 400% for the first $400,000 of qualifying training expenditure incurred for each YA from YA2024 to YA2028. The enhancement is only applicable to qualifying training expenditure incurred on courses that are eligible for SkillsFuture Singapore funding and aligned with the Skills Framework.
For more information on EIS, please visit: https://www.iras.gov.sg/schemes/disbursement-schemes/enterprise-innovation-scheme-(eis)
Organisations may sign up for ISCA courses that is approved under this scheme and claim for tax deduction through EIS on the net amount, after less any government grant or subsidy.