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The Ministry of Finance is conducting a public consultation exercise on draft guidelines for what constitutes Research & Development (R&D) for income tax purpose. This exercise will take place from 21 August 2008 to 10 September 2008.

Draft R&D Guidance

2. In Budget 2008, four income tax changes were introduced to encourage pervasive R&D to be done in Singapore. Specifically, the R&D-related income tax changes are:

(a) an increase from 100% to 150% in tax deduction for R&D done in Singapore;

(b) tax deduction for R&D can be claimed even if the R&D is not relevant to the company's existing trade or business;

(c) R&D Incentive for Start-up Enterprises (RISE); and

(d) R&D Tax Allowance scheme.

The details of the schemes are due to be released by end-September 2008. To provide greater clarity on what constitutes R&D for income tax purpose, R&D guidance will be released together with the other details of the various R&D schemes by end of September 2008.

Consultation Details

3. The consultation guidelines and draft R&D circular can be found in the government's central consultation portal http://www.reach.gov.sg as well as the Ministry of Finance's website at http://www.mof.gov.sg/Public-Consultation/Public-Consultation-Open. Respondents may send their comments to the Ministry of Finance directly via the website, email, fax or post.

MINISTRY OF FINANCE