Public Consultation on R&D Guidance

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1. The Ministry of Finance is seeking comments on the draft Research & Development (R&D) Circular which sets out the guidelines on what constitute R&D for income tax purpose. We invite you to contribute comments on the R&D guidelines and the list of general information required for making R&D claims. Your views are important as they would help improve clarity and relevance of the final circular.


2. The existing definition of R&D in section 2 of the Income Tax Act (ITA) will be amended together with other income tax budget changes in this year. Specifically, the proposed amendments to the R&D definition are as follows:


Existing Definition

Proposed Amendments

"research and development" means any systematic or intensive study carried out in the field of science or technology with the object of using the results of the study for the production or improvement of materials, devices, products, produce, or processes, but does not include —

(a) quality control or routine testing of materials, devices or products;

(b) research in the social sciences or the humanities;

(c) routine data collection;

(d) efficiency surveys or management studies; or

(e) market research or sales promotion;

“research and development” means any systematic, experimental and investigative study that involves novelty and technical risk with the objective of (a) acquiring new scientific or technological knowledge, or (b) using the results of the study to create or improve materials, devices, products, produce or processes by using science or technology, but does not include —

a) Quality control or routine testing of materials, devices, or products;

b) Research in the social sciences or the humanities;

c) Routine data collection;

d) Efficiency surveys or management studies;

e) Market research or sales promotion;

f) Routine modifications or changes to products, processes or production methods;

g) Cosmetic modifications or stylistic changes to products, processes or production methods;

h) Creation of contents for content-related products (such as movies, television programs, books, computer games as well as electronic versions of print media); or

i) Software development not intended for purpose of sale, rent, licence, hire or lease to two or more persons who are not related persons.

3. The primary aim of this exercise is to obtain feedback to improve the clarity of the guidelines on what constitutes R&D for income tax purpose and the list of general information required of taxpayers in making the R&D claims.


4. We hope to obtain feedback on the draft R&D guidelines and the checklist. We seek your full support to ensure that the consultation exercise is productive and focused. Respondents are requested to please follow these guidelines:

  1. Identify yourself as well as the organisation you represent (if any) so that we may follow up to clarify any issues, if necessary.
  2. Make your comments clear and concise.
  3. Use the prescribed template provided to help us understand your feedback better.
  4. Your comments should focus on how the R&D guidelines can be better written to ensure clarity.
  5. Explain your points with illustrations, examples, data or alternative formulations of the draft guidelines as far as possible.

5. This draft R&D guidance is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final R&D guidance. All comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated in the final R&D Circular.


6. The draft R&D Circular is available for public consultation from 21 Aug to 10 Sep 2008. Comments received by the Ministry after 10 Sep 2008 will not be considered as they will be too late for incorporation into release of the final circular.


7. Please send us your comments, using the prescribed template, by:

a) email to; or
b) fax to 6337 4134; or
c) post to: Ministry of Finance
100 High Street, #10-01
The Treasury
Singapore 179434.

Alternatively, you might wish to provide your comments using the online questionnaire. We encourage comments through the online questionnaire or by email as they will reach us faster and speed up the process of consideration.


8. For your convenience, the relevant documents relating to this public consultation exercise can be downloaded for further reference. Please click here.
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Public Consultation